investment

Post-Cyprus Blues: Confusion and an Erosion of Faith

"It may be misleading to project the crisis and resolution in Cyprus onto other quite different financial crises in other quite different economies. The common ground may be a rising fear of capital controls and the search for safe havens that won't implode or change the rules overnight. The sudden emergence of risk in what was perceived to be a safe haven will likely spark interest in non-banking safe havens, for example, precious metals, and what correspondent Mark G. calls the Glass Jar Bank, which he observes is still a popular alternative in Eastern Europe to entrusting one's cash to banks." Continue reading →

Continue ReadingPost-Cyprus Blues: Confusion and an Erosion of Faith

Student Loan Debt Growing, Along With Delinquency Rate

"Total student debt was the only type of household debt that continued to rise throughout the recent recession while most households were de-leveraging, and is now second only to mortgage debt. You’ve probably heard the 'trillion dollar' number in the news. I think the most worrying stat is the increasing rate of defaults. Actual delinquency rates are often understated because almost half of these loans are currently in deferment or in grace periods and therefore are not in the repayment cycle. Among loans that are actually subject to repayment, delinquency rates are over 30% overall and rising." Continue reading →

Continue ReadingStudent Loan Debt Growing, Along With Delinquency Rate

Caterpillar Punked By Chinese Fraud, To Write Off Half Of Q4 Earnings

"Fraudulent Chinese corporations are nothing new - we have been warning about them since late 2010. One company, however, which apparently was completely unaware of the now pervasive and proven for the past two years Chinese corporate fraud, is US industrial titan Caterpillar. This was made clear when, after hours on Friday night naturally, the company revealed that it had been misled by 'deliberate, multi-year, coordinated accounting misconduct' at a subsidiary of a Chinese company it acquired last summer, leading it to write off most of the value of the deal." Continue reading →

Continue ReadingCaterpillar Punked By Chinese Fraud, To Write Off Half Of Q4 Earnings

What Happens After the Housing Bubble Reflates?

"This Forbes analysis is actually a fairly sophisticated analysis on how realtors decide whether houses are a good buy or not. The article concludes that houses may be cheap to buy given current conditions. Now, the larger question begins to percolate: Are houses cheap because of fundamental economic factors or for monetary reasons? After all, if central banks print lots of money – as they have been – then people are making more money. There will surely be a housing bubble given the rashness of central banking actions. Whether the dollar itself will survive upcoming monetary events is the larger – and even more serious – question." Continue reading →

Continue ReadingWhat Happens After the Housing Bubble Reflates?

An Investment that Thrives, Even in a Weak Economy

"New mechanisms for productivity help drive existing businesses to be more efficient, and that is always in demand – especially during tough economic times. And, yes, the last 20 or 30 years of R&D is really just starting to peek its head into the markets. Everything from robotics to genetics to artificial intelligence are just now making their way to true commercial viability. The last five years of economic fear have created an innovation vacuum at the top of the tech stratosphere. This has opened opportunities for startup companies to seize upon the reticence of their much larger competitors." Continue reading →

Continue ReadingAn Investment that Thrives, Even in a Weak Economy

The Next Domino: Slovenia Government Bond Yields Spike

"The country, another relative newcomer to the euro, is struggling with its own banking problems. The IMF expects Slovenia will have to recapitalize its three largest banks this year, which could cost a billion euros. That will increase Slovenia's budget deficit, which is bad news because the country is already having trouble selling sovereign bonds on the open market in order to finance the government. So, the question is whether Slovenia will be the next EU member state to need a bailout. Slovenia's top central banker, Marjo Kranjec – who also sits on the ECB Governing Council – says it's not going to happen." Continue reading →

Continue ReadingThe Next Domino: Slovenia Government Bond Yields Spike

Insider buying of gold stocks surges to multi-year highs

"Insiders are typically contrarian investors – buying shares when they perceive them to be undervalued. Right now, it appears many think the stocks are going for fire-sale prices. They are usually early, too. Historically, insider transactions often foreshadow market moves six- to 36-months in advance. While that may be quite a wait, it’s interesting to see insiders display this level of confidence in a sector that the broader investment community has been fleeing." Continue reading →

Continue ReadingInsider buying of gold stocks surges to multi-year highs

Cypriot Banking Crisis – A Turning Point for Your Portfolio?

"Most Americans would not be directly affected if North Dakota decided to seize citizens' money in order to pay its bills, but all Americans would be deeply disturbed by such an action. The principle of the matter couldn't be clearer; outright theft is wrong. But it'd probably be fear, not principle, that would have people heading for their banks in droves to withdraw cash as fast as possible. People not living in Europe should not kid themselves into thinking that this is just a European problem. With a fractional reserve banking system, it doesn't take a majority of bank depositors to decide to withdraw their cash to put their banks out of business." Continue reading →

Continue ReadingCypriot Banking Crisis – A Turning Point for Your Portfolio?

The Top 4 Lessons of the Cyprus Debacle You Shouldn’t Have to Re-learn

"Lesson #1 - Do Not Trust Politicians. Lesson #2 - Ditch the 'This Can’t Happen Here' Mentality. Lesson #3 - Recognize the Pattern (Bank Holiday, Wealth Confiscation, Capital Controls). Lesson #4 - Take Action Before it is Too Late. You must take precautionary action and internationalize before it is too late to act. Unless you are part of the political elite, you won’t know exactly when the window of opportunity will slam shut. For Cypriots that moment came on the morning of Saturday, March 16 , 2013. It is better to be a year early than a minute late." Continue reading →

Continue ReadingThe Top 4 Lessons of the Cyprus Debacle You Shouldn’t Have to Re-learn

Europe’s Bailout Rebound Lasts Three Hours. Reverses Despite Panicked EU Minister Tweet.

"The faceless bureaucrat who heads the faceless, unnamed EuroGroup admitted the truth: the rescue of Cyprus would serve as a model for the next round of bailouts. That sent a clear message: anyone with a lot of money deposited in a bank of Italy or Spain or Portugal is at risk. He may wind up like all those rich Russians who thought their money was safe in Cyprus. Down went bank shares. Down went the stock markets. Down went the euro. Wait! Wait! He then reversed himself again. He tweeted a message that Cyprus was a one-time event after all. Too late. The truth was out. The damage was done. The stock markets did not reverse again. Neither did the euro." Continue reading →

Continue ReadingEurope’s Bailout Rebound Lasts Three Hours. Reverses Despite Panicked EU Minister Tweet.