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Showing posts from July, 2010

Features of the week

We've got some great items for you on the economic recovery, the story of the Weimar hyperinflation, strategies and outlook of top-performing hedge funds, and more in this Friday's "Features". Enjoy the links.

1. Top performing hedge funds that dodged the crash & rode market rally back turn gloomy - Bloomberg.

2. BBC interviews Adam Fergusson, author of When Money Dies.

3. Read Adam Fergusson's history of the Weimar hyperinflation, When Money Dies, along with Jens O. Parsson's Dying of Money online for free - Prudent Investor.

4. Anthony Boeckh on The Artificial Recovery (pdf) - Financial Sense.

5. The Ruling Elite Called... (James Quinn) - Financial Sense.

6. AR TV on the state of the financial world - Abnormal Returns.

7. Breaking down 2Q earnings season - WSJ Marketbeat.

8. Humans are "slightly smarter, pants-wearing primates": Monkey Economics - Big Picture.

9. Why America locks up too many people - The Economist.

10. Geoff Gannon interviews Jon Helle…

Victor Sperandeo warns of hyperinflation

"Trader Vic" Sperandeo is on CNBC describing the historical pattern for the onset of hyperinflation, and says the conditions for such a runaway inflation are now here in the US.

We're getting more familiar with these types of extreme forecasts as our economy drifts into unchartered territory. It seems market watchers are almost growing accustomed to hearing predictions about a coming hyperinflation or a looming deflationary depression.

Still, it should be noted that Sperandeo is a serious guy and a very serious researcher (my observations based on reading his work and listening to his interviews). His knowledge of economic history and the nature of money creation and business cycles is profound. So while the forecasted event is an extreme and rare event, don't dismiss Vic as "just another scaremonger".

It is striking to note that while Vic is arguing his case for the likelihood of hyperinflation, in effect the spiralling collapse of a society and an economy, h…

Matt Simmons interview on BP Gulf disaster

King World News recently interviewed Matthew Simmons for his latest take on the BP Gulf disaster.

You can hear Matt's alarming warnings about the coming fallout from this environmental catastrophe, along with his view of what's really happening in the Gulf and the region, in the interview linked above.

In addition, we also want to examine some of Matt Simmons' claims and his motives for speaking out on this disaster. There's been a lot of talk about Simmons' short position in BP stock (which Matt spoke about in a recent Bloomberg TV interview), along with some questions (including my own) about any conflicts of interest he might have as founder of the Ocean Energy Institute, "a think-tank and venture capital fund addressing the challenges of U.S. offshore renewable energy".

Earlier today, Chris Nelder pointed to this Robert Rapier piece entitled, "Is Matt Simmons Credible?". Rapier outlines what he feels are some of Simmons' more outlandish or …

Interview with Jack Schwager at CIO

Aiki14 points us to this excellent interview with Jack Schwager at Capital Ideas Online.

If you're a fan of The Market Wizards book series and the trader interviews Schwager has compiled over the years, you'll definitely want to check out the distilled wisdom in this piece. Here's an excerpt from the discussion:

"CIO:Thank you Mr. Schwager for taking out time and talking to us. Over your long career in the markets you have interacted with some of the greatest traders. Could you share with us what you perceive are the qualities of great traders?
Jack Schwager: There are really very many. I will give you a few key ones. First on the list would be discipline. I can't think of anybody I have interviewed or met as a trader who has been very successful but has not been disciplined. I think that's probably an absolute essential. Secondly, money management and risk control is certainly critical in one form or another. Most of the traders that I have interviewed will b…

Features of the week: Finreg+ edition

As you all know, the Dodd-Frank financial reform bill passed the Senate on Thursday and is set to be signed into law by President Obama next week.

What will the future hold for us as a result of finreg, and how will we live in the months and years ahead? Let's look at the week's events and the shape of weeks to come in our, "Features of the week".

1. Senate passes landmark financial reform bill - US News & World Report.

2. The best financial reform? Let bankers fail - Jim Grant.

3. Stocks tumble, yen, treasuries advance on recovery concern - Bloomberg.

4. Jim Grant confident QE 2.0 is just around the corner - Zero Hedge.

5. Goldman Sachs' $550 million SEC settlement summarized in 140.

6. Barry Ritholtz feels SEC case is "a painful loss for Goldman Sachs, with expensive repercussions" - Big Picture.

7. The $4 Trillion Question: Dhaval Joshi provides an illuminating look at housing supply and strategic default - Big Picture.

8. Fed gets more power, responsibil…

CEOs won't invest in America, why should you?

Remember what we said in our last post about the dangers of corporatism and crony capitalism taking hold in America? Frederick Sheehan, writing for Credit Writedowns, has a few things to say on that point.

From, "Corporate CEOs won't invest in America, why should you?":

"American CEOs are voting with their feet. Since they aren’t investing in the United States, does it make sense for the individual stockholder or bondholder to do so?One armchair columnist told his readers to ignore corporate whiners. Those overpaid stuffed shirts will always gripe, goes his argument. The columnist may have a point, but also an inconsistency. The columnist, who is also an economist, has skewered CEOs in the past for cashing out their stock options as quickly as possible. There is much truth to that.
But, it is not in a CEO’s interest to publicly denounce the Obama administration, which still has over two years to hand out and withhold favors. It is the favoritism that the CEOs are denou…

The Economist: future of Europe and the EU

Worthwhile read from the latest issue of The Economist on the future of Europe and the EU.

"...It is too soon to write off the EU. It remains the world’s largest trading block. At its best, the European project is remarkably liberal: built around a single market of 27 rich and poor countries, its internal borders are far more porous to goods, capital and labour than any comparable trading area. It is an ambitious attempt to blunt the sharpest edges of globalisation, and make capitalism benign.The problem is that the “European social model” has become, too often, a synonym for a very expensive way of doing things. It has also become an end in itself, with some EU leaders calling for Europe to grow purely in order to maintain its social-welfare systems. That is a pretty depressing call to arms: become more dynamic so Europe can still afford old-age pensions and unemployment benefits. Europe is in desperate need of good ideas and leadership. Too many EU leaders have tried to secure v…

Jim Rogers FSN interview: lessons on life & investing

The Financial Sense Newshour recently interviewed famed investor and author, Jim Rogers on lessons in life and investing.

If you'd like to gain some key insights and life wisdom from one of the great self-made thinkers and investors of our time, listen to this very fine interview. Host Jim Puplava talks to Jim Rogers about the importance of doing your own thinking, living your own life, and doing the things you love, which, as Rogers points out, are key to living a very happy life.

Enjoy the discussion, and if you get something out of it, be sure to pass this interview on to your friends or a young person starting out in life. They may appreciate it as much as you have!

Related articles and posts:

1. Jim Rogers on life, travel, and investing - Finance Trends.

2. Jim Rogers: The Calculating Cowboy - Finance Trends.

Hedge funds scale back trading

Hedge funds have scaled back their trading and are favoring cash over pressing their convictions in big directional trades.

Bloomberg reports that it may amount to more than the usual summer lull, as the uncertainty hanging over global markets has left many a trader wary of unseen risks.

"...Reeling from the worst second-quarter performance in a decade, hedge funds have scaled back trading as they struggle to figure out where markets are headed amid sometimes vicious crosscurrents in stock, commodities and other markets, according to brokers and managers. “There’s a degree of being frozen in the headlights, of not knowing what sectors to emphasize, of what securities to emphasize,” said Tim Ghriskey, chief investment officer of Solaris Asset Management LLC, a firm in Bedford Hills, New York, with $2 billion in hedge funds and conventional stock funds. Hedge-fund managers, who oversee $1.67 trillion in assets, are reluctant to put money to work as they are buffeted by a wid…

91 European banks face stress tests

Toni Straka at Prudent Investor has the details on "Europe's 91 Potentially Bad Banks":

"After weeks of intra-Eurozone haggling the Committee of European Banking Supervisors (CEBS) has finally published the list of 91 banks currently undergoing stress tests whose results are eagerly awaited for July 23.

The 91 banks (list below) represent 65% of Europe's banking business, in itself an indication that domino theories, where one failure will lead to others, may develop into a harsh reality, keeping Europe's extensive cross-border business in mind.

Such scenarios do not appear to be part of the stress tests which display a silk glove, business-as-usual approach..."

See the full post for a list of the 91 banks facing "stress tests" and a breakdown of their national origin. In terms of sheer numbers, it seems Spain and Germany lead the list. Also, some thoughts from Toni on the assumptions built into the tests, as well as a link to the CEBS report.

Happy Independence Day! Thoughts on American liberty

Happy Independence Day to all!

You may want to check out these excellent links from our past July 4th post on the Declaration of Independence and the struggle for liberty. You'll note the special emphasis on two leading figures in the cause for American independence, Thomas Jefferson and Thomas Paine.

Enjoy these informative and historical links, and have a great July 4th holiday.

FT on BP spill: "Anatomy of a disaster"

That's the title of the Financial Times' weekend piece on the BP Gulf oil spill, at least for my print edition.

Check out the online version, "BP: the inside story", which looks back on the still-developing disaster in the Gulf and its likely financial and environmental outcomes:

"...The Deepwater Horizon accident has been one of the most shattering disasters ever to hit a large international company. Not because of the 11 deaths on the rig, terrible though they were. Not because of the environmental impact, or even the economic damage to the fishing and tourist industries of the Gulf. The devastating blow to BP comes because of the way the disaster has pitted the company against the US government and the American people. The story of the spill is how the fury of a nation was turned on a single company.Less than a year ago, Deepwater Horizon seemed to have set BP on a very different course. Last summer, the group drilled the deepest well ever developed for a comme…