Wednesday, January 30, 2008

Rally time?

Put your rally caps on. Despite a growing sense among investors that US stocks have entered a bear market, some traders and speculators are expecting an intermediate term rally.

No sooner had I posted the article, "Yeah, it's a bear market" to Safehaven.com, than Steve Saville came right in with an article entitled, "A stock market bottom". And since Steve has been keeping a keen eye on the internals of the market, let's hear what he has to say.

To briefly summarize, Saville is looking at the possibility of a near-term stock market bottom. He bases his call on the recent preponderance of new lows on the NYSE and the expectation that a recent selling climax should pave the way for a five month-long rally.

Still, he points out that any expected rally will take place within the context of a secular bear market, and he stresses the importance of measuring market performance in real terms.

"As an aside, for the past seven years we've consistently maintained that US equities are mired in a secular bear market as defined by long-term downward trends in VALUATIONS (P/E ratios, etc.) and REAL prices (gold-denominated prices). In a high-inflation world it is very important to define the long-term trend in this way, rather than in terms of nominal dollar prices, because it is purchasing power and not monetary value that matters.

For example, if the US stock market were rising at 5% per year while the US$ were losing purchasing power at the rate of 10% per year then it would not, in our opinion, be reasonable to claim that US stocks were in a bull market. What we would have, in that situation, is a bear market in the dollar as opposed to a bull market in equities."

So Steve's longer-term view on the market is very much in line with that of Dow Theory Letters writer Richard Russell, who stresses the importance of valuations when sizing up the stock market.

Also, his comment on measuring market performance in terms of gold recalls the views of Marc Faber and Jim Dines, who remind investors to view market performance in real (inflation-adjusted) terms.

Now let's jump over to Frank Barbera's recent Financial Sense Market Wrap Up for another look at market conditions ahead of the Fed's meeting today.

In, "All eyes on the Fed", Frank summarizes the recent market action and notes the possibility for an upcoming Fed-induced rally.

While he feels that market action has become increasingly bearish, he sees a setup for a relief rally, provided the Fed comes through with a hoped-for 50 basis point cut in interest rates following Wednesday's meeting.

"Be aware that over the last few weeks, the steady downtrend in stock prices world wide is strong confirmation that a bear market, possibly a bear market of epic proportions, has taken control. For months this column has warned readers of precisely this outcome, and only now, with prices badly battered do we see the first real hope for a recovery rally.

That said, we are under no false illusions. The current tenuous lease on life courtesy of technical oversold readings is highly dependent on additional help from monetary policy. If the Federal Reserve does not cut interest rates by at least .50 basis points tomorrow, then the disappointment will reign supreme, and stock prices are likely to get very ugly once again."


So now you're up to date. Check out both articles for more, and recognize any upcoming rally for what it is really is. At this point we are looking at the possibility of a several months-long relief rally within a longer-term bear market. Don't get caught up in the hype.

Monday, January 28, 2008

Yeah, it's a bear market

Last week we talked about how the US stock market's recent bearish action had spread worldwide.

Today we're going to take a look at where the US markets currently stand, and give you a quick overview of why we think US stocks have entered a bear market.

As a starting note, I should mention that we are basing our definition of a bear market not on the standard definition of an index down 20% from recent highs, but largely on the action of the market according to Dow Theory.

And according to our favorite newsletter writer and Dow Theory specialist, Richard Russell, the market has been in bear territory now for some time, as signaled by the primary bear market confirmation back on November 21, 2007.

That's where we are now. We won't know how long the bear market will last (or how severe it will prove to be), but if history is any guide, it should end in a period of public apathy or disgust towards the stock market and a resurgence of value in the markets, with shares trading at low P/Es and bearing significantly higher dividend rates.

And if you'd like to go by the more popular acid test of 20 percent losses from recent highs, or a violation of trend, we can highlight that sort of news for you as well.

Taking a quick look at the Wall St. Journal's table of major US and global stock market indexes, we see that most of the major index groups are down year to date, with many of the leading averages currently trading at the low end of their 52 week range.

This does not necessarily imply a bear market, but we are already getting to the point where leading indexes such as the Dow Jones Stoxx 600 are down 20 percent from recent highs.

The MSCI World Index is down around 14 percent from its October record highs, and the S&P 500 is down 15 percent from its October high. Many global share markets have dropped 20 percent or more from their recent highs:

"Mexico, Sweden, France, Poland and Australia are among the more than 40 countries whose benchmark indexes have slumped more than 20 percent from their highs of 2007, the common definition of a bear market. Europe's Dow Jones Stoxx 600 Index has tumbled as much as 24 percent from a six-year high on June 1. In the U.S., the S&P 500 dropped 15 percent from its record reached in October."

So as you can see, the situation is not limited to the US (or our imaginations) and worry has been spreading throughout the world's financial markets.

Could we get a rebound later in 2008? Anything is possible, but for now, as Carl Swenlin has noted, "bear market rules apply".

Sunday, January 27, 2008

Jukebox


Rock n' Roll, live. Enjoy this weekend's jukebox.

1. Tyrannosaurus Rex - Sara Crazy Child.

2. Black Sabbath - War Pigs.

3. The Who - Young Man Blues.

4. The Faces - Gasoline Alley/Around the Plynth.

5. Rolling Stones - Tumbling Dice.

6. Ramones - You're Gonna Kill That Girl.

Friday, January 25, 2008

Features of the week

We've compiled some of the week's most interesting articles and interviews in our, "Features of the week". Hope you enjoy them all.

1. The rogue trader who created Societe Generale's $7.2 billion trading loss was earlier described as a "computer genius".

Now Information Week says the bank "hacker" had only limited computer skills.

2. Why the current bull market in gold may surpass the 1970s run.

3. Nouriel Roubini: US in recession. Bloomberg interview.

4. A study by the Center for Public Integrity shows 935 examples of "false statements" made by top Bush Administration officials while hyping the Iraq War.

5. Fannie Mae and Freddie Mac may face $16 billion in losses due to declines in the value of subprime mortgage bonds.

6. The New York Times profiles casino billionaire Sheldon Adelson.

7. Confidence in the contemporary art market slumps 40% according to new survey.

8. Credit default swaps could weigh on banks. Article notes that counterparty risk "is almost impossible to calculate with any accuracy".

9. Forget the wisdom of crowds. Marc Faber & Jim Rogers on gold, China, and the renminbi.

10. Bloomberg interviews George Soros, who offers his view of a coming financial crisis.

11. Greg Peel weighs the arguments made by Soros and other Davos attendees.

12. Bear market rules apply. Carl Swenlin charts recent market action.

13. Kirk Report readers share their trading and investment lessons.

14. Scenes from the Ron Paul Revolution. Reason magazine cover story includes an interesting analogy which likens Ron Paul's influence to that of the Velvet Underground and the Ramones.

Have a great weekend everyone, and thanks for reading Finance Trends Matter.

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Wednesday, January 23, 2008

Roubini: US in recession

Video: Bloomberg interviews economist Nouriel Roubini from Davos.

Roubini says that by his reckoning, the US is already in recession. The only question now is how hard the "hard landing" will be.

Roubini feels this recession will be "much more painful, protracted and ugly than the one we had in 2001". He also notes that there is likely to be a severe slowdown in growth for the rest of the world's economies, and that China, Europe, and emerging markets will not be able to "decouple" from the US should the recession prove severe.

For more on this topic, see Nouriel Roubini's RGE Monitor blog and our recent post, "Recession in real terms".

Tuesday, January 22, 2008

Fed cuts rates in "emergency" move

The Federal Reserve has cut the fed funds rate to 3.5 percent, down three quarters of a point from its previous level of 4.25 percent. The discount rate was also lowered to 4 percent.

Here's more from Reuters:

Tuesday's rate cut, a week before Fed policy-makers convene for a regularly scheduled meeting on Jan. 29-30, was eye-popping in the context of the Fed's usual gradualist approach.

But the Fed still needs to do more, traders and analysts said.

"The market is telling the Fed that they have to ease more," said Martin Mitchell, head of government trading at Stifel Nicolaus & Co in Baltimore.

The Fed's biggest easing in the funds rate since October 1984 occurred while U.S. Treasury Secretary Henry Paulson called for a government stimulus package, which some analysts dismissed as being too small to revive a deteriorating economy.

In fact, more Wall Street analysts are predicting a U.S. recession this year. UBS became the latest firm to forecast the U.S. economy would contract in the first half of the year.

On one side of the fence, the traders and market participants who have become accustomed to easy money conditions are calling for more. Focused on the short term, and the steadily deteriorating condition of inancial markets, they cry out to be saved by central bank liquidity.

On the other side of the fence, are those who recognize the longer-term impact of these easy-money stimulus moves. In a word: inflation.

Even if it helps in the short run, easier monetary policy now would hurt the economy in the long run by weakening the dollar and boosting inflation, said Haag Sherman, managing director at Salient Partners in Houston.

"Ultimately these rate cuts will be self-defeating," Sherman said. "They are going to prove inflationary and bad for the dollar."

Additional commentary and video on the Fed move and the economy from Bloomberg; plus, more news of stocks taking it on the chin over in the Asia-Pacific region.

And if you'd like more perspective on the effectiveness of these Fed moves, please see our post on the last series of Fed rate cuts. Bob Hoye of Institutional Advisors makes some interesting points on the direction of short-term interest rates and the economy.

Monday, January 21, 2008

Market update

US markets are closed today, due to the Martin Luther King holiday, but I thought we'd do a bit of an international market news update and stay up to date.

Though US stocks are not trading this Monday, there seems to be enough bad news hanging over the US stock market and economy to help drive international share markets lower today.

A quick review of the news shows one downbeat headline after another and poor market performance all around. The news from Australia, Japan, the UK, and Europe shares one main theme: worries over the state of the American economy.

Here is a selection of quotes from the articles linked above.

From, "European stocks down 5.8 percent...":

European shares fell nearly 6 percent on Monday, their biggest one-day slide since the Sept. 11, 2001 attacks, as fears of a U.S. recession and more write downs in the financial sector sparked a broad-based selloff.

"This is like a panic. It's like out, out, out (of stocks). Run for cover," said Dirk Mueller, a trader at Frankfurt brokerage ICF.

"There is a very ugly sense of capitulation and the worst thing is that we can't see where it will all end," said Javier Galan, fund manager at Spanish brokerage Renta 4.

From, "Footsie's biggest ever one-day points fall":

The FTSE 100 has marked its biggest ever one-day fall - in nominal terms at least.

Outstripping the points losses of Black Monday and September 11, 2001, the index has ended down 323.5 points, or 5.5%, at 5578.2. In percentage terms it has not quite matched the day of the US terror attacks, when the FTSE 100 slumped 5.7%.

From, "Japan stocks fall to 2-year low on local, US slowdown conern":

Japanese stocks fell to a two-year low on concern the world's two largest economies are slowing.

``The Japanese economy has been weakening and a lot of economists had been overly optimistic,'' said Soichiro Monji, who helps oversee $47 billion at Daiwa SB Investments Ltd. in Tokyo. ``The negative news is reminding investors of the instability of U.S. financial institutions and the economy.''

And in Australia, "Dear, oh dear...":

THE sharemarket took a another bath yesterday, for the 11th day in a row, a rout that is now assuming bloodbath proportions.

The ASX 200 index closed 166.9 points, or 2.9 per cent, lower at 5580.4, and the All Ordinaries fell 168.5, to 5630.9

A Macquarie Equities private client adviser, Marcus Droga, said there was still a strong sense of concern among investors.

"It's all running off the back of the US situation, the rescue package announced [by US President George Bush], and overriding concern over whether or not they are slipping into recession."

So as you can see, the recent bearish action in the US markets has now spread worldwide, at least for the time being.

What lies ahead for US and global stock markets? We'll try and examine that question further later on this week. Till then, have a good day (and don't panic!).

Friday, January 18, 2008

Features of the week

The American consumer (formerly known as, "citizen" or, "a human being") has become an unwitting participant in a giant real-life simulation experiment. How so?

Helicopter drops of money rain down on us like manna from heaven, and the American consumer will, in turn, find ways to spend the proceeds, thereby generating economic growth. And jobs!

Or at least, that's the plan.

Let's see what kind of economic stimulus will shape our behavior in this Friday's edition of, "Features of the week".

1. Wall Street writedowns surpass $100 billion. Hat tip to Abnormal Returns.

2. Bush and Bernanke back fiscal stimulus. Spend, spend, spend!

3. "American GDP: Can we trust the BEA data?", asks Ronald Cooke.

4. Near record monetary growth and monetary inflation. John Williams of Shadow Statistics looks at reconstructed M3 money supply figures and sees an inflationary recession ahead.

5. Hong Kong and Singapore are ranked highest in economic freedom, according to an annual report by the Heritage Foundation.

6. Freight costs for bulk commodities fall to six month lows, as the Baltic Dry Index plunges from its recent highs.

7. DINL's latest Global Macro Roundtable letter reviews financial events of 2007 and offers their outlook for 2008. Special emphasis on commodity and energy related investements.

8. The invasion of the sovereign-wealth funds. Economist cover story.

9. The Quest for Supergenes. Bloomberg Markets article reports: "Craig Venter and rival genetic engineers are shaking up science--and venture investing--with plans for man-made organisms designed to pump out fuel and clean up waste."

Why do I get a bad feeling about this?

10. Mises and Mercola on, "Another Drug War Fallacy".

11. "The Political and Economic Agenda for a Real Gold Standard", by Ron Paul.

12. Dying to Live. A reminder: you only live once.

Thanks for checking in to Finance Trends Matter. If you enjoyed this week's "Features" post, and you'd like to pass it on to a friend, just click the "email post" icon in the post footer.

Enjoy your weekend everyone.

Wednesday, January 16, 2008

Recession in real terms

Talk of a US recession is heating up again, and this time it seems people are taking the prospect of a slowdown more seriously.

In fact, most observers seem to have dropped the infantile "r-word" code and are now using the full word "recession". This is a grown-up step for them.

But while the mainstream is only now just catching on to the idea of an "impending" recession, there are some, like Jim Rogers and Marc Faber, who say the US is already in a recession and probably has been for some time.

The problem in identifying the true onset of a recession is that the data which most people use to measure economic growth has been manipulated. Governments routinely massage the data to make things appear better than they actually are.

So, you have unrealistic inflation numbers (especially in view of rampant money supply creation worldwide) and false GDP numbers. As a result, no one relying on fudged data can accurately assess the onset of recession or periods of true economic growth.

Here's how Marc Faber summed it up in a recent interview.

"Well, personally, I think that the US, if you measure economic statistics properly –and the government is lying blatantly – the US went into recession 3 months ago. And I’m saying the government is lying blatantly, because they take nominal GDP and then they fiddle around with inflation figures. I mean none of your listeners have an inflation rate of less than 5 to 6% per annum. You just can’t exclude food and energy prices and healthcare costs from the CPI, from the cost-of-living increases.

So nominally the US economy may still be growing, but inflation adjusted –in other words, in real terms – we’re already in a recession. And most US households, except for the super rich, are today no better off than they were five or seven years ago. Their income gains have all been eaten up by cost increases by inflation."

As Frank Barbera and Peter Schiff pointed out in a recent Financial Sense Newshour broadcast, any argument about whether or not a recession is coming is silly, as economic data from privately gathered sources is totally consistent with recession. Compare this with government data which understates inflation and overstates GDP.

Meanwhile, the banks are acting like they know what's coming. As the Financial Times reports, leading US banks like Citigroup and Merrill Lynch have taken a "$21 billion bail out" from foreign investors.

Follow the money; they're taking these cash infusions because they need to shore up their balance sheets to survive a recession and any further shocks to the financial system.

"Vikram Pandit, Citi's new chief executive, said the size of the fundraising was intended to ensure that the bank remained well capitalised even in the face of a serious US downturn. "There is no doubt we're in the midst of a very challenging environment," he said."

So as I see it, that's where we're headed. What are your thoughts?

If you'd like to know more, check out the links to the recent FSN broadcast and listen to the interview with Marc Faber, if you haven't already. See you Friday.

Monday, January 14, 2008

Gold and "Summers-Barsky" theory

There was an excellent article on gold by John Dizard in the past weekend edition of the Financial Times.

Dizard's column piece, though brief, gave an informed overview of the metal's ongoing bull run, while assessing the possibility of a coming correction in the gold price.

In, "Gold is a bright prospect for the bold", Dizard draws on the opinion of one long-bullish portfolio manager and the ideas found in the "Summers-Barsky" theory to chart gold's future course.

"Mr Palmedo is one of the adherents of what gold people call “Summers-Barsky”, a theory of the relationship between gold and real returns on investment developed by two Harvard professors in 1985. One of them, Lawrence Summers, went on to become US Treasury secretary, president of Harvard University and, ultimately, an FT columnist.

Summers-Barsky, as described in their dense econometric paper, tracked and modelled the price of gold from 1730 to 1985 against interest rates, price indices and, for the latter years, equity returns.

Essentially, the professors found an inverse relationship between the price of gold and the real returns people can earn on their financial and industrial capital. As they put it: “The willingness to hold the stock of gold depends on the rate of return available on alternative assets.” Gold is a way to preserve capital, not increase it. If you can earn high rates or profits, you will be induced to sell gold and invest it in productive capital or interest-bearing paper."

Have a look at the full article at the link above.

Meanwhile, if there is a gold correction coming in the near future, it will likely have to wait another day.

Bloomberg reports that gold and platinum reached new record highs in earlier trading today, as a declining dollar fueled demand for precious metals and agricultural commodities.

Still, with speculative long positions increasing in gold, some analysts are becoming more cautious and increasingly expectant of an upcoming correction. We'll be watching.

Friday, January 11, 2008

Features of the week

Gold, grains, and interest rates. Value investors, and value traps. All this and more in our latest edition of, "Features of the week".

1. US's AAA credit rating 'under threat', says Moody's.

2. Bernanke signals deeper rate cuts ahead.

3. Gold futures rise to record $900.10 on interest-rate outlook.

4. Joseph Dancy on " 'Panic buying' in the grain markets" and record low global grain inventories.

5. Gold hits new all-time highs. Commentary on gold prices and investment demand for gold.

6. Value traps revisited. John Rubino recalls a June 2007 interview with Bearing Asset Management principals Bill Laggner and Kevin Duffy. See their comments about financial shares, brokerage stocks, and other "value traps" in the market.

7. Controlled Greed points to a video lecture series with value investors Frank Chou, Marty Whitman, Irving Kahn, and more (see "Guest Speakers" link).

8. Tune into the Financial Sense Newshour this weekend for an interview with Paul Kasriel, noted Northern Trust economist. The focus will be an economic forecast for 2008.

Update: A correction: Paul Kasriel was last weekend's guest interview. This week's broadcast features an interview with Marc Faber, who also shares his 2008 outlook. Thanks for the pointer, BMB!

9. What's left for government to do? Stephen Goldsmith on government's "core" functions and outsourcing public-sector services.

10. The tax that's anything but fair. A critique of the FairTax.

Enjoy your weekend, everyone. Thanks for reading.

And if you'd like to save our blog in your favorites folder, or share the site with others, bookmark Finance Trends Matter.

Wednesday, January 09, 2008

Gold hits new all-time highs

Gold is making new all-time highs today, as the dollar price for spot gold rises above $890 an ounce.

Strong fund buying since the start of the new year, momentum in the key Japanese gold futures price, and the launch of a new gold contract in Shanghai helped to fuel the rise, according to Reuters.

With the recent bullish action in gold prices, I've been planning a little wrap-up of some interesting gold commentary. We hope this post will shine some interesting light on the precious metal's bull run. Let's begin.

1. Financial Times - "Gold is the new global currency". FT seems to be gradually coming around to the idea that gold is, in fact, money. Yes, Virginia, gold has been money for over 2,000 years, and it will still be here when those banknotes you hold in your wallet are nothing but museum pieces (to paraphrase Richard Russell).

2. Bloomberg - "Gold climbs to records as investors seek alternative asset". Professional investors argue over the merits of buying and owning gold. Still, it's nice to own something that won't get cratered by unexpected defaults and faulty agency ratings.

3. Prudent Investor - "Gold hits a record - you would not know from the WSJ". Toni Straka makes some interesting observations on the mainline media's haughty attitude towards gold and honest money in general.

4. Finance Trends Matter - "Recent Gold Action". If you'll take a look at this article from April 7, 2006, you will notice mention of a negatively slanted story in CNN Money entitled "$600 gold: Want in? Think twice".

A very authoritative piece, which at that time, warned readers of the dangers of investing in an overstretched gold market. The only problem was, gold shot right through the dangerously unstable $600 level and zoomed right up to $700 in no time.

CNN Money then dusted off the same piece and tacked on "$700 gold" in the article title as a substitute. The link now points to an article with this revised title. Talk about your all-time dishonest mainstream media moves.

Since the originally titled article is no longer found on the web, except for reference in CNN Money related article footnotes, I had to search for another reference to the original article. You can find it in this post, at the Kontent Review blog.

You'll also find reference to the original $600 gold article in this Poynter Online article. Note the date of the article and original references to the $600 gold price.

Now you know the real story.

5. James Turk - "In 2008 gold should glitter". Article in the latest SFO argues for a continuation of the gold bull market.

Well, that should give you something to chew over. And if you'd like any bearish perspectives on the gold price, check out Marc Faber's recent call for an upcoming gold and commodity correction over the short-intermediate term (he is still long-term bullish on gold).

Or you could just go and read some old CNN Money articles.

See you on Friday, gang.

Tuesday, January 08, 2008

Ray Dalio in FT

If you stopped by FT Alphaville yesterday, you may have already seen mention of Financial Times' interview with hedge fund manager Ray Dalio, of Bridgewater Associates.

The full article is available at the link above (FT.com), and it is an interesting profile of one of the hedge fund world's most highly regarded figures. Here are a few excerpts from the piece:

"Mr Dalio, who founded his company, Bridgewater Associates, more than 30 years ago, is relentless in his pursuit of difference. He tracks his funds' correlations to the market and quickly tacks away whenever they appear to converge.

His singular view has shown results, propelling Bridgewater to become a highly regarded $150bn institutional manager as well as the third biggest hedge fund manager in the world. Bridgewater's hedge funds typically returned about 15 per cent a year, after fees, for the past 15 years. In 2007 the performance range was 9 to 11.2 per cent, net of fees, for its three hedge funds, a respectable showing in an environment where many big funds have faltered."

The article goes on to detail Dalio's views on investment performance, leverage, and the changing face of investment management.

"One thing he is certain about is the profound change that he says is taking place in the investing business as traditional asset classes are dissolving.

" "Investments were [once] in stocks and bonds and managers specialised in one or the other. An investment manager was different from a real estate owner, who was different from a private business owner. Now [almost] everything that earns money is securitised, often derivatives are created on them and the game is to make money by mixing them into optimally structured portfolios." "

You can see the full article online at the link above or in today's Financial Times print edition.

Ron Paul on Leno, Bloomberg

Presidential candidate Ron Paul flew down to L.A. yesterday to appear on the Tonight Show with Jay Leno. Video clips of this appearance courtesy of DailyPaul.com.

Paul was denied entrance to a Fox News sponsored "forum" debate in New Hampshire last Sunday night. Uproar over the move led the New Hampshire Republican party to pull their support for the Fox "forum".

So, with the writers' strike freeing up opportunities for guest bookings, Jay invited Ron Paul over to Burbank to talk about the exclusion from the Fox debates and the growing support for his election campaign.

Paul took some quick time out from the New Hampshire primary to spread his message to America's late-night television audience, and was able to make some very important and easily comprehensible points. But don't take our word for it. Check out the interview.

Update: Ron Paul interviewed on Bloomberg TV.

Monday, January 07, 2008

Marc Faber, Jim Rogers on Bloomberg

Update: Bloomberg's July 14, 2008 Jim Rogers interview is here.

Marc Faber and Jim Rogers are featured on Bloomberg today in two individual video interviews.

Marc Faber tells Bloomberg he expects strength in the dollar over the short term, though he is still bearish on the US dollar over the longer term, and that US stocks may outperform emerging markets over the next three to six months.

He also expects commodities to peak and begin a meaningful correction in the coming weeks. Bloomberg's companion article notes that Faber has been correct on his calls to buy gold, but wrong in past calls warning of over-optimism regarding Brazilian and Argentinian shares (both commodity country plays).

Oh, and I should note that Faber specifically mentioned the media's silence regarding Ron Paul's 10 percent standing in the Iowa caucus.

Funny that people who live outside the country (in Marc's case, Thailand) should have more of an idea about what's going on in our political elections than many of the people who actually live here and vote in them.

Meanwhile, Jim Rogers is bearish as ever on the fate of the US dollar. While his comments to Bloomberg may seem, on the surface, a contradiction of his friend Marc Faber's sentiments, they are aligned in their rather grim long-term views on the US currency's prospects.

Incidentally, Jim Rogers (who now lives in Singapore) has also given favorable mention to Ron Paul in a previous video interview with the Financial Times.

Like Faber, Rogers recognizes that Paul is the only presidential candidate who has any real knowledge of the damage done to our nation and our economy through inflationary central banking.

Rogers is also sticking to his call for a US recession, again noting, like Faber, that recessions do not spell the end of the world, and are a healthy part of the capitalist economic cycle.

He reiterates his long-term position on the supply and demand picture for commodities, but offers some interesting updates on the attractiveness of various individual commodities and commodity sectors.

Check out the video interviews at the links above, and enjoy.

Keep reading Finance Trends Matter for more.

McGovern: Bush must go

I don't really like bringing up politics too often on the blog, but I think I'd be remiss in denying the importance of George McGovern's recent editorial in the Washington Post.

George McGovern called for the impeachment of President Bush and Vice-President Cheney on Sunday in a Washington Post piece entitled, "Why I Believe Bush Must Go".

McGovern's editorial lists many of the reasons for impeachment and argues that this administration is far worse than Richard Nixon's disgraced presidency. While voicing his conviction on the need for impeachment, he recognizes that the current political climate does not favor this development:

"...there seems to be little bipartisan support for impeachment. The political scene is marked by narrow and sometimes superficial partisanship, especially among Republicans, and a lack of courage and statesmanship on the part of too many Democratic politicians. So the chances of a bipartisan impeachment and conviction are not promising.

But what are the facts?

Bush and Cheney are clearly guilty of numerous impeachable offenses. They have repeatedly violated the Constitution. They have transgressed national and international law. They have lied to the American people time after time. Their conduct and their barbaric policies have reduced our beloved country to a historic low in the eyes of people around the world. These are truly "high crimes and misdemeanors," to use the constitutional standard."

Last night, after reading the editorial, I thought back to one example of this administration's outrageously criminal behavior.

It was an instance which prompted my own comparison of the Bush presidency to Nixon's disgraced second term as president. Sadly, it was one that made Nixon's Watergate-tainted presidency look, by that point, almost palatable in comparison.

But, whether you agree or disagree with this opinion, the importance of this editorial is clear. As earlier commenters have noted, this McGovern piece serves as an interesting trial balloon in a leading American newspaper of record. The response to this editorial may serve as a weather vane that tells us which way the political winds are blowing.

Friday, January 04, 2008

Features of the week

As promised, today's "Features" post will focus on some of the key social and economic trends of 2007, while also examining the financial trends that may take hold in the year ahead.

What will the markets hold in store for 2008? We'll start down that road today in our "Features of the week".

1. $100 oil. You heard it here first from Jim Rogers.

And here's a 2006 interview with energy investor, Bill Powers that provides background on the sustained rise in crude oil and energy prices.

2. Bullish on bullion. FT weighs in with a full page article about the ongoing bull market in gold prices.

3. Marc Faber still thinks gold is a good place to put your money.

4. Why are Sovereign Wealth Funds so eager to invest in banks?

5. Gillian Tett on why corporate default rates will matter in 2008. A look at the world of leveraged finance and funding for sub-investment grade companies.

6. "Agflation" and soaring agricultural commodity prices were big stories in 2007. Will higher prices for food and grains continue in 2008?

7. Here's one recent trend that was recently reversed: New York eclipses London on value of IPOs. A definite turnaround from the news and sentiment of late 2006 and early 2007.

8. Goodbye dollar, hello inflation. Will the dollar continue to lose favor in 2008? Who will provide the world's reserve currency in age of global inflation?

9. Investment strategy: guidelines from 2007's performance.

10. Financial Times and Saxo Bank provide forecasts for 2008.

11. Stop making resolutions & start thinking. The Financial Philosopher on choosing your path in 2008, and beyond.

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Thursday, January 03, 2008

Friday's look ahead

A note to Finance Trends readers. Be sure to join us tomorrow for our first "Features of the Week" post of 2008.

We'll take a look back at some of the key trends and investment themes of 2007, see how some of those trends are unfolding so far in the new year, and look ahead to the possibilities for 2008.

We covered many topics here at Finance Trends Matter during the past year; energy, oil prices, housing, subprime, gold and precious metals, commodities, the rise of global inflation, population growth and resource scarcity, performance of global stock markets, and more.

So stop by on Friday, when we'll review these topics and update them with some of the most interesting financial news of early 2008. See you then.