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Showing posts from October, 2008

Features of the week

Many fascinating articles to share in our, "Features of the week" . 1. Halloween anniversary of a global stock market peak . 2. Approaching zero : Fed cuts to 1%, and may do more. 3. Chart Chatter: a look at the major US share indices . 4. Commodities head for worst month in 52 years. 5. Controlled Greed on John Maynard Keynes: the money manger . 6. Do we need more of Keynes now? - Frank Shostak. 7. Intervention doesn't work: Jim Rogers' quarrel with CNBC . 8. Marc Faber : "Bernanke is a disaster". 9. Short sellers aren't jackals , they're bears, Fleckenstein says. 10. Money worries should be telling (and teaching) you something. 11. Why thugs must not be allowed to prevail - Luke Johnson. 12. Peak oil: are oil prices destined to rise again? 13. Farm credit squeeze may cut crop output , spur food crisis. 14. Many US homebuyers underwater ; Hamptons home prices plunge . 15. Steve Forbes: How capitalism will save us .

Marc Faber: "Bernanke is a disaster"

Market strategist and investor Marc Faber joined Bloomberg yesterday to talk about the Fed rate cut and its affect on the markets. As those who are familiar with Faber's views have probably guessed, Marc was none too impressed with the Federal Reserve's latest action, or any of the recent efforts to "pump liquidity" into the markets and the economy. When asked about the job Ben Bernanke is doing as Fed Chairman, Faber responded by saying "Bernanke is a disaster". He also pointed out that the recent Treasury and Fed interventions and rule changes have actually created more volatility in the markets , citing the recent ban on short-selling as a primary example. Plenty more to hear in this interview clip, including a discussion of the current "inflation or deflation" debate. Click the link above to watch. You can also check our related posts section for previous Faber interviews to see how this Fed-driven boom-bust cycle has come full circl

Seasoned investors search for values

Welcome to our new readers, many of whom are joining us this week via links from Investment Postcards and The Kirk Report . If you would like to view our most recent posts, please visit our home page . You can also browse through our "Favorite Posts" section to get a taste for our site, or try our custom search bar to find more articles and posts on your favorite topics. Thanks for visiting Finance Trends Matter . Enjoy the posts! As we mentioned yesterday in, "Are we too bearish?" , today's post focuses on areas of investment that are starting to look attractive to seasoned investors. Some of the well-regarded market veterans you'll hear from on this topic are: Julian Robertson , Jeremy Grantham , Jim Rogers , and John Paulson . Whether you're currently bullish or bearish on stocks and other asset markets, we think you'll find some interesting points of views expressed here. Let's jump right in... A Tiger's Eye View of the Marke

Are we too bearish?

I've noticed a definite trend while looking over our last few "Features of the week" posts, and that is a recent preponderance of bad news. Whether we're talking about the direction of global financial markets (mostly down this year) or the fate of the global economy, it seems that most of the news we are talking about here is of the "gloomy" variety. In a way, this makes sense. When we look at the news related to the markets and the economy in recent months, we see that most of it is bad. In fact, one of the defining features of this recent downturn, or "economic crisis", is its ability to continually surprise to the downside. In fact, I think it's safe to say that most people have been caught off guard by how quickly and how far certain problems could spread throughout our well-linked global financial system. Yes, there's been an avalanche of news regarding falling markets and never-ending bailouts over the past several months, an

Jukebox

Welcome to this week's Almost Famous edition of the jukebox . 1. Simon & Garfunkel - America . 2. The Who - Sparks . 3. Joni Mitchell - River . 4. Rod Stewart - Every Picture Tells a Story . 5. Little Feat - Easy to Slip . 6. Led Zeppelin - That's the Way . 7. Neil Young - Everybody Knows This Is Nowhere . 8. Fleetwood Mac - Future Games . 9. Elton John - Tiny Dancer . 10. Led Zeppelin - Tangerine . 11. Beach Boys - Feel Flows .

Features of the week

Keeping up with the global economy in our, "Features of the week" . 1. World markets slide on global recession, earnings fears. 2. Emerging markets at risk : John Authers on emerging market sell-offs. 3. New Zealand's record rate cut aims to ease pain of global recession. 4. Icelanders see Icarus-like fall of greed . 5. Chart: Shipping costs index is "biggest bubble of them all" . 6. Argentina's government tries to take over private pension funds as the country faces its second debt default this decade. 7. Mish uncovers the flawed logic in Greenspan's "flawed" model . 8. Bear Stearns assets lose $2.7 billion ; taxpayers on the hook. 9. Do our rulers know enough to avoid a 1930s replay? 10. George Reisman on, "The Myth that Laissez Faire is Responsible for Our Present Crisis" . 11. GLG's Roman, Roubini predict hedge fund failures , regulation. 12. Roubini sees crisis worsening : Video. 13. Art sales boo

Jim Bianco: Fed acts are 'hyperinflationary'

Jim Bianco joined Bloomberg TV today to discuss the Fed's latest backstop of the financial markets, a plan to provide $540 billion in loans to money market funds. More details on the plan from Bloomberg : "The Federal Reserve will provide up to $540 billion in loans to help relieve pressure on money-market mutual funds beset by redemptions. ``Short-term debt markets have been under considerable strain in recent weeks'' as it got tougher for funds to meet withdrawal requests, the Fed said today in a statement in Washington. A Fed official said that about $500 billion has flowed since August out of prime money-market funds, which with other money-market mutual funds control $3.45 trillion. The initiative is the third government effort to aid the funds, which usually provide a key source of financing for banks and companies. The exodus of investors, sparked by losses following the bankruptcy of Lehman Brothers Holdings Inc., contributed to the freezing of credit

Marc Faber on Bloomberg TV

Marc Faber joined Bloomberg TV yesterday for an extended guest interview segment. While the emphasis of Bloomberg's story was on Marc's view of the stock market , there were far weightier issues discussed in this interview. Within the first several minutes of this clip, you'll hear Faber's views on government stimulus and interventions, the needed workings of the market, the reality of a current US recession, and the very economic survival of this country and other sovereign nations. Here are some quotes pulled from Bloomberg's print article : "``The governments in this world have no other option but to print money. That will lead down the road to inflation,'' Faber said. ``You don't need to be an economist graduated from Harvard to know we're already in a recession. They will just put white paint on a crumbling building...'' ...The U.S. economy slipped into recession a year ago, Faber said, and it won't recover until cons

Irving Kahn on the BBC

There have been quite a few mentions of value investor Irving Kahn in the business press lately. Whether it's due to his relatively optimistic view of the economy and the stock market, or the experience which comes from having lived and worked through the Great Depression, the 102-year-old investor is currently in demand for his views on the economy and investing. Kahn was recently mentioned in posts at Controlled Greed , and also in Lucy Kellaway's recent FT column , where I learned that Mr. Kahn was recently a guest on a BBC radio podcast . You can listen to his brief interview by clicking the podcast link and downloading an MP3 file to your media player of choice. In it, Irving Kahn shares his memories of the 1929 market crash and the Great Depression, along with some personal insights on today's market and economy. Enjoy the interview! Further reading on Irving Kahn follows below. Related articles and posts : 1. "...And then there's Irving Kahn&qu

US faces recession, Bernanke's stimulus

I don't want to start off this week's posts with the usual comparisons of our current economic climate to the Great Depression, but we do have some news out acknowledging the onset of a notable US recession. From FT, "US faces worst recession in 26 years" : "The US economy appears to be plunging into what many experts believe will be its worst recession since 1982. Senior officials at the Treasury and Federal Reserve are confident that the rescue plan for US banks will succeed in preventing a financial system meltdown and ensure there will not be a repeat of the Great Depression. But they know that a sharp economic downturn is already baked in the cake. They do not,however, know how deep or protracted it will be. The focus of concern is shifting from the markets – although these remain dangerously stressed – to the wider economy, where the consumer finally appears to be cracking. The Fed and Treasury were expecting the economy to weaken but not as rapidly

Jukebox

Hits from the Jukebox . Just press play. 1. Oasis - Cigarettes and Alcohol . 2. Radiohead - Creep . 3. Japan - Methods of Dance . 4. Depeche Mode - See You . 5. Kate Bush - Hounds of Love . 6. New Order - The Perfect Kiss .

Features of the week

A plunge in the Baltic Dry index may herald a global slowdown, while financial markets grow expectant of an endless parade of bailouts. Meanwhile, Warren Buffett is cheerfully buying US shares for his personal portfolio. Why? All this and more in our, "Features of the week" . 1. Baltic Dry index at lowest since 2002, global recession fears grow. 2. Hedge funds in grip of vicious redemptions, selling cycle . 3. Buffett says " Buy American. I Am." ; call gets lukewarm reception . 4. Switzerland pumps billions into UBS bank rescue plan ; bank bailout angers Swiss public . 5. Markets get addicted to bailouts . 6. Taleb's "black swan" investors post gains as markets dive. 7. Financial websites see record spikes in visitors . 8. Putin may use credit squeeze to destroy oligarchs . 9. Maoxian points to interviews with stock trader Nicolas Darvas . 10. An ABC Lateline interview with investor Marc Faber . 11. Junk bonds signalling a

Treasury bank plan: not so "voluntary"

That latest Paulson/Treasury plan to buy equity stakes in "healthy" banks is now a done deal , with nine banks having signed on to accept money from the government in exchange for ownership stakes. In exchange for $250 billion in funds from the government, the banks are required to issue preferred shares paying a 5 percent dividend to the government, along with warrants on common stock . Despite earlier assurances by Hank Paulson that the ownership proposal would be a "voluntary" arrangement between the government and banks, it seems there was actually a strong element of coercion in all of this. Consider the following description of this "voluntary" plan as it took shape: " Neel Kashkari , the U.S. Treasury official overseeing the $700 billion rescue of the financial system, said government equity injections will be aimed at ``healthy'' firms. ``We are designing a standardized program to purchase equity in a broad array of financ

Record point rally for Dow & market views

After suffering one of the worst down weeks in US share trading history (last week's stock market decline was one of the worst on record ), the Dow Industrials and S&P 500 both staged magnificent one-day rallies Monday. More on this from Bloomberg : "U.S. stocks staged the biggest rally in seven decades on a government plan to buy stakes in banks and a Federal Reserve-led push to flood the global financial system with dollars. The Standard & Poor's 500 Index rebounded from its worst week in 75 years with an 11.6 percent advance, its steepest since 1939, and the Dow Jones Industrial Average climbed more than 936 points. Morgan Stanley soared 87 percent after sealing a $9 billion investment from Japan's Mitsubishi UFJ Financial Group Inc. Alcoa Inc., General Motors Corp. and Chevron Corp. climbed more than 20 percent each as all 10 industries in the S&P 500 added more than 7 percent. The S&P 500 rose 104.13 points to 1,003.35. The Dow increased 9

Treasury to buy stakes in 'healthy' banks

As mentioned in our weekend "Features" post, the US Treasury recently announced its intention to buy direct equity ownership stakes in US banks. Those plans come into clearer focus Monday, as Treasury official Neel Kashkari, speaking in Washington, offered a few details on this latest feature of the government's $700 billion bailout plan. Bloomberg reports, "Treasury to invest in 'healthy' banks, Kashkari says" : " Neel Kashkari , the U.S. Treasury official overseeing the $700 billion rescue of the financial system, said government equity injections will be aimed at ``healthy'' firms. ``We are designing a standardized program to purchase equity in a broad array of financial institutions,'' Kashkari, who heads the department's Troubled Asset Relief Program, said in a speech in Washington. ``The equity purchase program will be voluntary and designed with attractive terms to encourage participation from healthy institutions.

Features of the week

A picture of the week just ended, an extraordinary one for US and global markets. After many consecutive days of stock market declines, are we about due for a rebound? Let's take a look around and see if we can't make sense of these markets and our world in our, "Features of the week" . 1. Market crash shakes the world - FT in depth look at the crisis. 2. Putting the stock market decline in perspective . 3. What is going on? An explanation for the non-financial person . 4. "I'm Miss World ; somebody kill me...". Will gloomy sentiment and falling markets set the stage for a grunge revival? 5. Capitulation watch: "Are we there yet?" , asks Chris Puplava. 6. US Treasury may buy stakes in banks within weeks. 7. Banks to lend you your own money - Daily Mash. 8. Vix exceeds 75 , as volatility hedge funds thrive in this market. 9. Yen gains most in decade as investors abandon carry trade. 10. G-7 vows "all necessary st

Jim Rogers speaks with Bloomberg TV

Famed investor Jim Rogers joined Bloomberg television for a couple of interview segments amidst Friday's worldwide market rout. In the first interview segment with Bloomberg's Betty Liu, Rogers offers his view of the current market panic, which he calls "an old fashioned selling climax", and goes down the list of his current market positions. · Rogers says he is still buying assets that he feels have unimpaired fundamentals, and is still short long-term Treasuries, calling US Treasury bonds "the last bubble left" in America. · When asked about various calls for bailouts and capital market suspensions, Jim responded by noting the idiocy of these measures. Rogers reminds Bloomberg that historically, these market interventions have never worked, and have only made things worse over time. · Excesses built up in the previous boom/bubble period must be cleaned out with failures and private-market bankruptcies in order for the system to reorganize itse

Marc Faber: rate cuts no help

Marc Faber spoke with Bloomberg News (audio) in Manila today to address the question of whether today's historic global rate cuts will help the financial markets, particularly global equities. Bloomberg - "Faber says rate cuts will fail to stem equities rout" : "Investor Marc Faber said a series of coordinated interest-rate cuts by central banks including the Federal Reserve to ease the economic effects of the global financial crisis won't halt a worldwide slide in equities. ``Artificially low interest rates'' that encouraged consumers and banks to take on more debt were the main cause of the credit-market turmoil that caused the failure of Bear Stearns Cos. and Lehman Brothers Holdings Inc., according to Faber, who predicted the 1987 stock-market crash. ``The slashing of interest rates will not help very much,'' Faber, who manages $300 million, said in an interview in Manila. `They may cushion somewhat the decline but make matters worse.&

Global rate cuts have arrived

Those globally coordinated rate cuts that so many people were looking for have arrived. More on that from the New York Times : "Central banks around the world cut short-term interest rates by up to half a percent on Wednesday after investors across Asia and Europe unleashed waves of sell orders onto already depressed stock exchanges. The Federal Reserve , the European Central Bank and other central banks from Britain and Switzerland to Canada and China announced rate reductions within seconds of one another. The British government separately announced a plan to pump billions of pounds into the country’s leading banks as part of a plan that would result in considerably greater government influence over the financial sector there. The Fed said in a statement that, because of weakening economic activity, it had cut the Federal funds target rate by half a percentage point, to 1.5 percent. It also cut its discount rate by the same amount. The vote was unanimous. The European

A week of global rate cuts?

"Don't appoint the people to get you out of a problem that got you into it in the first place" - John Loeffler , Financial Sense Newshour. So do the markets love this recently passed bailout plan or what? I mean, it's 1:00 pm (CST) and the Dow is only down around 541 points. Success! Update : make that 800 points ... And the global stock markets are loving it too (sarcasm alert). The FTSE 100 just had its biggest ever one-day point decline and its third largest decline in percentage terms , as global markets plummeted on fears of a spreading credit crisis. More from Bloomberg : " Stocks tumbled around the world, the euro fell the most against the yen since its debut and oil dropped below $90 a barrel as the yearlong credit market seizure caused bank bailouts to spread. Government bonds rallied. The Standard & Poor's 500 Index retreated 5.9 percent, extending the worst weekly slump since 2001, as concern slower global growth will curb demand

Outrage is here + themes for October

Back in July, as the fallout from the 2007 credit crisis deepened, Jim Grant wondered about the lack of popular anger over Wall Street malfeasance in a Wall Street Journal piece entitled, "Why No Outrage?" . Today, as the "Main Street" economy worsens and the House gets set to revote on a revised and enlarged bailout bill , that outrage is here, and it's growing. So while Goldman Sachs may be getting the best of the credit crisis (and Warren Buffett too ), the average American is not really enjoying the current environment. It's bad enough to be suffering through declining real wages, rising inflation, and an unacknowledged recession; throwing on endless financial industry bailouts to the pile (and thereby saddling Americans with even more debt and inflation ) is really adding insult to injury. Looking over the last month's posts, it's clear to see that we've spent a lot of time talking about these very issues. And that's natural, g