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CEO of World’s Biggest Bond Fund: Government Has Rigged the Game Against Investors

"Investors are being haircutted by at least 200 basis points judged by historical standards, which in the past offered no QE and priced Fed Funds close to the level of inflation. Large holders of U.S. government bonds, including China and Japan, will be repaid, but in the interim they will be implicitly defaulted on or haircutted via negative real interest rates. . . . Future haircuts might even include a wealth tax. Are gold and/or AA+ sovereign bonds good as money? Usually, but capital controls can clip you if you’re not careful." Continue reading →

Continue ReadingCEO of World’s Biggest Bond Fund: Government Has Rigged the Game Against Investors

Investors can’t beat the machines: Computer-dominated trading takes over

"The implication of all this for individual investors is straightforward: Don’t trade. Short-term trading has become so dominated by Wall Street’s computers that individuals—and professional managers—almost certainly will lose out to them over time. The obvious alternative, experts say, is to buy and hold diversified index funds with very low expenses. Odean says some of the poorest performances in his studies were turned in by traders who were the most confident of their abilities. This led them to trade even more often and incur even more risk." Continue reading →

Continue ReadingInvestors can’t beat the machines: Computer-dominated trading takes over

Rick Rule: This Is Fun

"Let's face it, I'm 60 years old. This is probably my last major market cycle. I'm going to make the most of it. I can tell you that I'm having the most fun I've had in my career for 13 years. I have spent all my life honing my skills, building up the capital, building up the client base – this is tailor-made for me. I realize this period is unpleasant for some people, but the market doesn't care if it's unpleasant. The market doesn't care if it's inconvenient. You take what the market gives you – and this market is giving me a gigantic sale on assets I want to own." Continue reading →

Continue ReadingRick Rule: This Is Fun

Gold Bears Pull $20.8 Billion as BlackRock Says Buy

"Hedge funds increased bets on lower gold prices after investors pulled a record $20.8 billion from bullion funds this year while BlackRock Inc. (BLK), the world’s biggest money manager, said it’s still bullish. Speculators held 67,374 so-called short contracts on May 7, 6.4 percent more than a week earlier, U.S. Commodity Futures Trading Commission data show. The net-long position dropped 10 percent to 49,260 futures and options. BlackRock’s President Robert Kapito said May 9 he would still buy the metal, echoing billionaire John Paulson, who’s sticking with a bullish view even after losing 27 percent in his Gold Fund last month." Continue reading →

Continue ReadingGold Bears Pull $20.8 Billion as BlackRock Says Buy

India Trade Deficit Deteriorates As Gold Imports Soar 138%

"India's economic boogeyman, the monthly trade deficit, continues to rear its ugly head, this and every time, driven be the country's insatiable desire for gold which is so powerful, the country took full advantage of the plunge in gold prices, and saw business imports of gold soar by 138% y/y in April, forcing the trade deficit to hit a 3 month high of $17.8 billion as more fiat left the country in return for bringing in more of the 'barbarous relic.' Gold imports more than doubled on both a Y/Y and sequential basis, with gold accounting for $7.5 billion, or 18% of total imports, compared to $3.1 billion in March." Continue reading →

Continue ReadingIndia Trade Deficit Deteriorates As Gold Imports Soar 138%

Hundreds of Bangladesh textile plants shut indefinitely

"The textile industry’s main trade body said all operations at the nearby Ashulia industrial zone on the outskirts of Dhaka were being suspended until further notice. Shahidullah Azim, of the Bangladesh Garment Manufacturers and Exporters Association, said the decision was made 'to ensure the security of our factories'. Most of Bangladesh’s top garment factories are based at Ashulia and there has been 'virtually no work' there since the April 24 Rana Plaza tragedy, Azim said. Ashulia is home to around 500 factories which make clothing for a string of major Western retailers including Walmart, H&M, Tesco and Carrefour." Continue reading →

Continue ReadingHundreds of Bangladesh textile plants shut indefinitely

Internet giant Amazon hit by first strike in Germany

"German employees of Amazon staged their first-ever walkouts on Tuesday as the US Internet retail giant was hit by a dispute over pay. Employees at two logistics centres in Bad Hersfeld and Leipzig launched a strike with the start of the early shift at 6:00 am (0400 GMT), the giant services sector union Verdi said. In Bad Hersfeld, strikers planned to march to a rally in the city centre at around 11:00 am (0900 GMT), while employees in Leipzig rallied in front of the warehouse. Verdi is demanding that Amazon’s 9,000 employees in Germany be paid according to a sector-wide wage deal for the retail and mail-order industries." Continue reading →

Continue ReadingInternet giant Amazon hit by first strike in Germany

Editorial-Page Fiction at the New York Times

"They want us to believe that 'slashed' budgets and inadequate spending have caused 'worse health outcomes' in nations such as Greece, Italy, and Spain, particularly when compared to Germany, Iceland, and Spain. But if government spending is the key to good health, how do they explain away this OECD data, which shows that government is actually bigger in the three supposed 'austerity' nations than it is in the three so-called 'stimulus' countries." Continue reading →

Continue ReadingEditorial-Page Fiction at the New York Times

Devastating News for ObamaCare Backers

"A new study finds that (as far as physical health is concerned) there is no difference between being in Medicaid and being uninsured. It’s hard to exaggerate what a blow this is to the people who gave us the Affordable Care Act (ObamaCare). Everything about ObamaCare—from the money we are spending to the damage being done to the labor market to the hassles the whole nation is going through—depends on one central idea: that enrolling people in Medicaid will give them access to better health." Continue reading →

Continue ReadingDevastating News for ObamaCare Backers

Flying the Government Skies

"The sequester cuts about $637 million from the FAA, which is less than 4% of its $15.9 billion 2012 budget, and it limits the agency to what it spent in 2010. The White House decided to translate this 4% cut that it has the legal discretion to avoid into a 10% cut for air traffic controllers. Though controllers will be furloughed for one of every 10 working days, four of every 10 flights won't arrive on time. The FAA projects the delays will rob one out of every three travellers of up to four hours of their lives waiting at the major hubs. Congress passed a law in 2009 that makes such delays illegal -- if they are the responsibility of an airline." Continue reading →

Continue ReadingFlying the Government Skies