Finance Trends Letter

Goodbye 2007, hello 2008. And to get us started, we have some interesting forecasts and predictions concerning world events and financial markets in the coming year. On the more "practical" side of the fence we have the Financial Times' predictions for 2008 , driven by the FT's "crack corp of pundits" who, "throw caution to the wind and risk humiliation in the pursuit of glory". So you see, they fully realize the folly of forecasting going in. This awareness, combined with the rather straight-laced tone of their forecasts is what leads me to label this exercise as a more practical and carefully considered example of the art of crystal ball gazing. Our second batch of forecasts comes from Saxo Bank's Outrageous Predictions for 2008 . I first stumbled upon Saxo's predictions in an english version Pravda article , and at first I thought the dire headline warnings about the direction of the US economy were a work of state-sponsored doomsaying o...

Merry Christmas and best wishes to everyone for the New Year. We'll see you after the holidays, when we'll take a look back at the events of 2007 and plunge headlong into 2008. Until then, have a great holiday & enjoy, "A Charlie Brown Christmas" .

A quick update to our earlier post on the relative lack of attention being paid to the war in Congo amidst the celebrity-driven campaign to save those affected by conflict in the Darfur region of Sudan. We posed the question of how to best help the people suffering in either conflict (and in all such future instances). This weekend I'm reminded of one possible way to send direct support to people in need. I'll let John Mauldin tell it, in an excerpt from his latest "Thoughts from the Frontline" e-letter. "First, let's quickly turn our attention to a practical way we can help save the lives of those who are desperately suffering in Darfur and Myanmar. Over the years my readers have generously supported the work of a very special group of guys who help bring aid to places where it is the most difficult, if not dangerous, to reach. Knightsbridge International is a small group of volunteers who go to places that are not safe but the needs for help is critical. ...

So many interesting news items and stories to share with you this Friday, I'm almost unsure of where to begin. Let's jump right into this latest edition of our, "Features of the week" . 1. Bear Stearns takes $1.9bn writedown on mortgage assets and reports its first quarterly loss in 84 years as a public firm. 2. Merrill Lynch may get $5bn cash prop from Singapore's Temasek Holdings. 3. Putin, the Kremlin power struggle, and the $40bn fortune . Wow. (Hat tip to 321gold ). 4. Can Greed Save Africa? . Great article from BusinessWeek. 5. Bill Gross joins FT's View from the Top to talk about interest rates, US recession, subprime, and investments. 6. Ron Paul talks to Maria Bartiromo in a recent BusinessWeek interview. 7. Comparison: Presidential candidates on monetary policy and USD . 8. The Art of the Deal . How the Nahmad family made billions trading art. 9. Faustian Bargain : Bloomberg special report on the credit crisis. 10. Auschwitz slave recalls concen...

Update: This article is now available online. See updated link to Fortune magazine. Investor Jim Rogers appears in the latest issue of Fortune magazine to share his views on China, commodities, and emerging markets, and offers up an excerpt from his new book, A Bull in China . Unfortunately, we can't see the article online just yet, but you can check it out at the newsstand or just wait until Fortune makes the full current issue available online (which should happen when the next issue comes out). I have read the article, so let me give you a quick little summary from memory. Of course, Rogers is bullish as ever on the future of China and his family has recently picked up and moved from New York to Singapore in order to be closer to the action. He offers some tips for those looking to buy shares of Chinese companies, and mentions some specific leading companies by name in an excerpt from his new book. He is also still bullish on agricultural commodities, citing sugar and cotton a...

In case you missed the recent FT article on investor James Passin and his trek through the frontier markets, we're including it again today with an additional update from the Seeking Alpha website. What are "frontier markets" anyway? Frontier markets are essentially the smaller up-and-coming emerging countries whose capital markets are are just beginning to develop, or those markets primarily consisting of smaller, illiquid companies. The small size of these markets and a relative lack of liquidity and information may serve as barriers to entry for larger investors and fund managers. Here's an excerpt from a Feb. 2007 Bloomberg article on the subject: Frontier markets, as defined by Standard & Poor's, are dominated by companies too small and too thinly traded to be ``investable'' for most fund managers. The acronym BRIC was coined by Jim O'Neill, chief economist at Goldman Sachs Group Inc., in November 2001. He said Brazil, Russia, India and Chin...

Over the weekend, I spent some time reading the first few chapters of Bill Bonner and Lila Rajiva's brand new book, Mobs, Messiahs, and Markets . This is shaping up to be a very interesting book so far, so I'll probably write a brief review when I've finished the book, but for now I want to mention something more topical. During a chapter on war and its accompanying atrocities (with some exaggerated and others ignored), the authors discussed Belgium's colonial rampage through Africa. They cited the Congo, where agents of Leopold II had, "treated the local blacks worse than slaves; they were rounded up, starved, beaten, and worked to death in forced labor camps. An estimated 10 million died." This is suffering and death on the scale of (or greater than) the Holocaust of the 1930s-1940s, but it is little mentioned today. This may be due to the passage of time, or the fact that the Congo remains far removed from our location and thought to this day. In its own ti...

Welcome to this week's edition of, "Features of the week" . We have many interesting items in store for you today, so sit back, take a few moments, and browse away. Enjoy! 1. Doubts intensify on central bank plan to save markets. 2. Central bank plan delays day of reckoning , say fund managers. 3. Central banks keep fueling inflation , says Jim Grant (Hat tip to Controlled Greed ). 4. Ron Paul is interviewed by Doug Casey's International Speculator newsletter. 5. Lebron Inc. Basketball star Lebron James has charted his own course towards building a personal business empire. 6. Nouriel Roubini feels we are experiencing the first real crisis of financial globalization and securitization . 7. Niall Ferguson: Memo to Market Dinosaurs . 8. Investor James Passin goes boldly where others have yet to tread. 9. Stratfor: China and the Arabian Penninsula as market stabilizers . 10. John Hussman on "an irrelevant Fed" (Hat tip to Dow Theory Letters ). 11. Bermuda ...

Just a quick reminder for anyone who hasn't viewed our list of the best investment websites . We've recently updated the list to reflect improvements in the Yahoo! Finance service and we've made some new additions to the list. Key among these is our inclusion of FT.com's recently updated Markets Data feature. So if you'd like to have a quick summary list of the best sites offering free market data, quotes, charts, and portfolio/watch list tools, do take a minute to visit the link and review our picks. You're sure to find some helpful investing and trading resources.

Here's the latest on the Fed rate cuts, as well as some analysis on what Fed rate cuts might mean for the US economy. From Reuters, "Fed cuts key interest rate by quarter point" : WASHINGTON (Reuters) - The Federal Reserve cut a key interest rate by a quarter-percentage point on Tuesday to help the U.S. economy withstand tightened credit and a prolonged housing slump. The central bank's decision takes the bellwether federal funds rate target down to 4.25 percent. While the action was widely expected, some economists had thought the Fed might offer a bolder half-point reduction in the rate, which governs overnight lending between banks. In a related move, the Fed trimmed the discount rate it charges for direct loans to banks by a matching quarter point to 4.75 percent. Anyone interested in reading the FOMC statement and related news should click on the article link above. Will the Fed's actions help bail out the US economy? Nadeem Walayat takes up this topic in an ...

Looking over the news this morning, it seems the big story in the US market is an $11.5 billion "capital injection" for subprime-beleaguered bank UBS. The European bank will raise the money from Singapore and Middle Eastern investors by selling stakes in the company. Financial shares, including those of UBS, reacted positively this morning to the news. Which of course, leads all to wonder: is it time to buy financials yet? Of course the big concern looming over financial companies and their shares is exposure to subprime mortgages and the illiquidity of assets in SIVs . And in case you still thought the subprime problem was well "contained", you obviously haven't been with us here on Earth these past few months. As FT Alphaville and Bloomberg point out, even the bond insurers are suspect . Monoline insurer MBIA is now facing scrutiny over its AAA rating as the company faces problems over the subprime CDOs it backs. This in turn spells trouble for all the AAA r...

Sunday night jams. Enjoy. 1. The Cure - The Caterpillar . 2. Sonic Youth - Silver Rocket . 3. The Jesus and Mary Chain - Never Understand . 4. Oasis - Songbird . 5. The Jam - That's Entertainment . 6. Velvet Underground - Femme Fatale .

Is Asia decoupling from the US economy? Will a mortgage rate freeze in the US help subprime level homeowners? Who is the next up-and-comer on the world industrial stage? Discussion of these topics and more in our, "Features of the Week" . 1. Rio chief says BHP proposal is "dead in the water" . 2. The Economist on, "The end of cheap food" . 3. Austrian economics vs. Bernanke economics . Define inflation, Ben. 4. Tim Condon of ING speaks with FT.com's "View from the Markets". Topics: a single Asian currency, Chinese inflation, emerging industrial powers, and Asian growth outlook. 5. After China, Vietnam will be the world's factory . 6. Many of the Middle Eastern share markets are rebounding nicely from their 2006 lows. 7. A Q&A with Jim Rogers on China and its/our future. 8. Marc Faber feels we are in a period of synchronized asset bubbles . 9. Look to private transactions to understand trends in the art market , writes Suzanne McGee...

An afternoon post to include a latest bit of Ron Paul media coverage. Found in WSJ.com's most popular articles sidebar, here is an excerpt from, "How Paul Could Change Race" . Manchester, N.H. -- After shocking the Republican Party establishment with a surge in online support, Rep. Ron Paul is trying to translate his Internet revolution into real votes, particularly in New Hampshire. The Texan's latest campaign swing through the early-primary state shows it is going to be a tough climb -- though he could have an impact on the race for the Republican presidential nomination. "As a realist and as an experienced political person, I know that it's extremely unlikely he is going to get the nomination," says Keith Murphy, who runs an unofficial Paul campaign headquarters at his Elm Street bar. "Having said that, if he can win in any state in the nation, it's New Hampshire." Much is made of Ron Paul's role as a Republican party "spoiler...

With the Baltic Exchange Dry Index ( BDI ) still up near its recent highs above the 10,000 mark, many are wondering if the shipping boom driven by Asian demand will hold. The Financial Times recently took up this issue by highlighting the view of one shipping executive, Nobu Su, chief of Taiwan Maritime Transport, who offered that current freight shipping rates were "insane". Here's more from FT's article, "Dry bulk bubble may have bouyancy to spare" . Nobu Su's outspoken comments about the bulk cargo market shine a spotlight on a remarkable piece of price inflation that has been little noticed outside the closed world of shipping. On Friday, the Baltic Exchange, which collects information about shipping markets, was quoting the standard charter rate for a Capesize dry bulk carrier - the largest kind, so called because it has to sail around Cape Horn and the Cape of Good Hope rather than use the Panama or Suez Canals - at $179,527 per day. The same rate ...

In an effort to help you better find the information you are looking for, I've installed a Google Custom Search bar to help you scour this blog for relevant posts. You'll find the new search bar in the lower right hand sidebar, underneath our Subscribe and Bookmark widget buttons. Just type in any keyword or search term you like, and hit the search button. All relevant results will be displayed on the next page, and you will also have the option of broadening your search over the entire web. I chose Google Custom Search, a much needed improvement to our previous site search tools, to help you better find the information you are looking for here at Finance Trends Matter. You will now be able to easily search through all our past content, and find related posts on any subject of interest. Quick example: say you came here looking for information about hedge fund manager, John Paulson. If you came to a certain post by way of a Google search, or a direct link, you may have seen onl...