#Eurogroup #JimRogers #MarcFaber #China #Cyprus

Investors' Insights:

Week Ended March 30, 2013

FIRST FINANCIAL INSIGHTS

"Investors' Insights"

At This Moment: Chinese Banks Are Being Hammered, Real Estate in the Ultimate Crony Capitalist State is Ugly | AgainstCronyCapitalism.org

You cannot even imagine how highly levered these Chinese banks and real estate developers are:think Japan 1980's, then double or triple your values. Japan didn't even build "ghost cities" to sustain their facade, but their multiple skyscraper- design proposals also got ridiculous rocketing for the moon. Similarities are apparent, although China is far from being comparable in terms of accounting, legal, audit and related regulatory standards. Risks are thus much greater. 

The Chinese are also capitalist neophytes associating with all forms of thespians practising nepotism. Imagine.Terrible! And no doubt suffer from the same old bubble syndrome " this time it's different ". It isn't. Never is, as most market bubble economies have, sooner or later, paid dearly for their excesses.

So as they say, "the rest as is history." Or will be.

First Financial Insights

March 29, 2013 

Wizards of Leveraged Bubbles

"Neophytes, Thespians and Nepotism - Could you Imagine?"

Marc Faber : U.S. Markets Won't Go Up Much More

Yes, No or Maybe. While we would feel confident is saying that markets are pretty much stuck in a range because of real underlying downward pressures caused by both resource-population and mathematical interest rate constraints; anything can happen to push prices upwards for an extended period of time. Markets represent an aggregate collection of socio-pathic thinking and rarely conform to what might be called rational thought phenomena. 

The drivers of greed and fear are emotions that do not have carved in stone algebraic equations that determine outcomes. Still, they somehow, in strange ways, connect to "perceived rational thought" or what otherwise might be defined as powerful persuasions built on contextual logic. However, when any "perceived key assumption" behind such contextual logic changes - then all hell breaks loose.

So remember, today's markets were driven by the comforting abstracts of a liquidity that was poured into to them by 24-hour  fiat-currency printing; that many, seem to assume has no limits. It does. Some event, or series, or connected events, will trigger either interest rates to rise, or profits to fall dramatically. These are likely rational reasons; the irrational reasons behind the markets emotions and related changes are much more elusive.

The point being, while for the most part we agree with Marc; US markets could still rise another 30% from here, and stay there for some time, - not likely, but it is still a possibility we must keep in mind. Markets can be cruel mistresses. 

First Financial Insights

March 28, 2013

Market Alchemy:

Aggregate Emotional Algebra mixed with Collective Socio-Pathology

     

Dr Peter G Kinesa : JIM ROGERS BLOG - #Cyprus is Doomed: 

Jim Rogers BLOG : Cyprus is a real threat to the U.S. Everyone was asleep at the switch, in fact; many had a hard time finding the switc...

No doubt that Cyprus is in a heap of trouble with the collapse of its international banking model, but it's the integrity of the EU where the bigger concern lies. How did they ever think these National Banks would survive, when assets totalled more than six times the national GDP - what nobody fears or understands the consequences of leverage? That leads to the next question - how many more skeletons lurk around the EU's closet? 

What can be surmised is that capitalization ratios of 1:8 may not be sufficient to ensure liquidity when  Euro bonds go - No Bid! The ECB should be tabling bail-out plans now, to preserve confidence when the proverbial crap hits the fan - which is a foregone certitude at some point. There is some big money to be made shorting these puppies. How long are you on Spain? Italy? Portugal? And their respective financial institutions - a little homework here has BIG profit potential.

Observe that the Cyprus contagion has also poured into Egypt as well. There are more coming as food and fuel shortages plague the world. Importantly, oil prices are not being depressed, which is a very bad sign, suggesting supply may be a bigger concern than demand. Hmm...Peak Oil? And gold, is just lingering, perhaps as Central Banks dump reserves to buy food and fuel; defraying political upheaval to a future date. There are known unknown reasons for these pricing events.

The big issues: Who and What is next when?

First Financial Insights 

March 27, 2013

So, Who's on First?

I don't know... 

After Cyprus, Euro Zone Will Slip Into Depression | 

Just so you know that we are not the only ones who logically link Cyprus to further troubles for the Euro zone, making their banks and securities a short-seller's paradise. More banking and government financing problems can be expected to ravage their economies. It is starting to make more sense to unravel this scheme, and let marginal countries devalue and print their own currencies so as to optimize their comparative advantages. This could revitalize their economies. 

Iceland was able to recover somewhat through devaluation, because it was not locked into another currency.

Where's Don Meredith when you need him? "Turn out the lights..."

First Financial Insights

March 26, 2013

"...the party's over"

Marc Faber: Endless Government Manipulation - McAlavany Interview

More of the same message, but it is amazing how quickly everyone forgets what the real issues are out there. It is always good to hear Marc spread the gospel, even though his focus comes from the neo-classical point of view. Moreover, he has a short to near term orientation, like many of today's investor/economists. By this, they rarely look at things beyond a ten-year time horizon. We do.

In fact, we believe going out 10, 25 or even a 100 years is essential and differentiates our thinking. Formulating such a long term look, gives us a bench mark that is proactive; allowing us to envisage the emerging patterns or templates quickly. For instance, Iceland, Ireland, Greece, Cyprus and others, support the template we see for many countries down the road, as they shift into a physical-economic resource destitution comparable to Nauru. And this is the global template that we envisage heading towards the longer term, as populations explode, while resources are completely exhausted.

So our investment conclusions, draw from the insights of the best short-term investors providing a more integrated view, when meshed with our far-off time-lines and emerging templates. And for that, we should all be the better..

First Financial Insights

March 25, 2013

In the long-term we are...

Dr Peter G Kinesa : JIM ROGERS BLOG - #Cyprus is Doomed

Dr Peter G Kinesa : JIM ROGERS BLOG - #Cyprus is Doomed: 

Jim Rogers BLOG : Cyprus is a real threat to the U.S. Everyone was asleep at the switch, in fact; many had a hard time finding the switc...

No doubt that Cyprus is in a heap of trouble with the collapse of its international banking model, but it's the integrity of the EU is where the bigger concern lies. How did they ever think these banks would survive when assets totalled more than six times the national GDP - what nobody fears or understands the consequences of leverage? That leads to the next question - how many more skeletons lurk around the EU's closet? 

What can be surmised is that capitalization ratios of 1:8 may not be sufficient to ensure liquidity when  Euro bonds go - No Bid! The ECB should be tabling bail-out plans now, to preserve confidence when the proverbial crap hits the fan - which is a foregone certitude at some point. There is some big money to be made shorting these puppies. How long are you on Spain? Italy? Portugal? And their respective financial institutions - a little homework here has BIG profit potential.

Observe that the Cyprus contagion has also poured into Egypt as well. There are more coming as food and fuel shortages plague the world. Importantly, oil prices are not being depressed, which is a very bad sign, suggesting supply may be a bigger concern than demand. Hmm...Peak Oil? And gold, is just lingering, perhaps as Central Banks dump reserves to buy food and fuel; defraying political upheaval to a future date. There are known unknown reasons for these pricing events.

The big issues: Who and What is next when?

INVESTORS' INSIGHTS
First Financial Insights 
March 27, 2013

So, Who's on First?

I don't know... 

Dr Peter G Kinesa : Al Jazeera English: #Cyprus bailout talks 'at very...

Dr Peter G Kinesa : Al Jazeera English: #Cyprus bailout talks 'at very...:

Cyprus bailout talks 'at very delicate stage' -  Al Jazeera English Who has been the primary beneficiary of the Euro, ECB and EU?...

We wholeheartedly agree with the good Doctor diagnosis, analysis and conclusive reasoning and also say its time for " For Let's Make a New Deal " or else many countries are a risk of just falling off the edge of the planet. Not going to be pretty. Nor would events be containable. 

So, whether its Bob Barker, Donald Trump or King Tu Tu this scheme is finished and its time to move on. 

First Financial Insights
March 24, 2013

The DEAL MAKER: NEW Head of ECB

Oh, by the way - You're FIRED!

#Cyprus, #JimRogers, #Russia, #WallStreetJournal

Investors' Insights:

Week Ending March 23, 2013

FIRST FINANCIAL INSIGHTS

"Investors' Insights"

“NEWS ALERT ”

Russia Rebuffs Cyprus Bailout

Click Above for today's Globe and Mail Article

This is getting to be worse than the Wild,Wild West or the Lehman Bros. fiasco of 2008. Where was the EU and ECB oversight in the first place? Does the ECB, EU and IMF not have any regulatory metrics in place to detect or prevent such issues from ever reaching this stage?. Granted Cyprus is less than .2% of the EU's GDP, but still, could you imagine the US not bailing out Rhode Island? Or Canda PEI? The message would be clear: "there is no political union nor governing Central Bank". 

This is the absolute wrong message for the EU and ECB to be sending ,when they will be facing crisis after crisis in the months ahead. Bond markets should be shrivering, as these new frontiers are openiing unknown, unknowns with the potential to dominoe into the global system. Trigering the much feared rise in interest rates around the world.

Whatever bailout funds Cyprus had expected it needed, is now sure to be much larger as every depositor with a heart beat will be looking to withdraw their funds as soon as possible. Some sources say the Russians have as much as $65 billion on deposit, that they could be wanting to pull out the moment the bank doors open.on Tuesday. This could therefore get much uglier.

Is it the beginning of the end for the whole EU experiment? It does not look promising.

Investors' Insights

First Financial Insights

Comments

The Globe and Mail

Toronto, ON
March 22, 2013

Unknown, Unknowns

Jim Rogers Blog :  Soaring Dow a Poor Indicator

Jimmy says it all in this television interview. Worth listening to his comments for five minutes. Right now, the stock markets are enjoying a "trillion dollar money printing party" that is creating loads of liquidity to keep the stock soaring fervour alive. It will not last forever. And as Jim says, when the printing stops and they turn out the lights - it will be very bad for everyone. Very Bad.

Here's the kicker. There is not much difference between  the Cyprus deposit tax and the debasement or dilution of wealth created by the printing of money.One approach is direct, while the other is quieter and invisible. Nonetheless the effects are exactly the same; banksters get their pound of flesh.

Something to think about this weekend.

First Financial Insights

March 21, 2013

One way or another...

The Frager Factor: Thanks to Russians and Chinese "Investor / Flippers" Making A Killing Again 

Not often do we comment on Real Estate, but it still remains one our favoured investment strategies against stock, bond, economic, political and currency risks. The Miami boom has been underway pretty much since the 2008 meltdown, when prices plummeted to 30 to 40% of construction costs on a per square foot basis. Buyers from all over the world flocked to the market cherry picking properties with cash or foreign credit, as the US banks were basically shut down, thereby limiting access to US buyers. Talk about shooting fish in a barrel.

Anyway the best of the bargains are pretty much done in Miami, but Real Estate still offers a long-term hedge against sovereign political, economic and currency risk. For instance, would you hold on to  your $10 million (Cdn) Villa in Spain, Greece, Cyrus or Italy; or rather own a $5 million dollar Chalet in Whistler, BC and a $5 million residence Australia? Why? The relative value of these two currencies should increase dramatically as global resources dwindle and the currencies of resource poor nations decline with their gloomy economic prospects.

Adam Smith recognized that the value of real estate is a function of the surrounding economic activity, infrastructures and prospects. Currency values embed this idea and thus sticking to nations with the higher ratio of resources (hard assets) per capita offer better long-term protection of your global purchasing power. The intrinsic hard-asset wealth ratio, is also a better metric and is more important than GDP - because you achieve comfort regarding sustainable economic activity.

While unique opportunities come and go, proper long-term positioning of realty portfolios should always remain foremost in mind. Even positioning as alternatives to stocks, bonds and precious metals needs to be considered. So determining the long-run geo-economic prospects is absolutely essential to sound investing. 

First Financial Insights
March 20, 2013

Visit My New $10M Villa in Cyprus

   

“NEWS ALERT MARKET WARNING”

Cyprus Rejects Deposit Tax
Click Above for today's Wall Street Journal Article

No one voted for what could have been the most devastating economic policy action in over a hundred years anywhere. Wall Street Journal's article sets out further details and is linked above. With the rejection of this plan the country still faces major hurdles in order to avoid bankruptcy - whether a deal can be cut with the Russians remains uncertain. We are consequently withdrawing our stern "Market Warning", but will continue to keep an eye on events, particularly if Cyprus is the first nation to be forced from the EU due to its financial and economic mismangement.

First Financial Insights

March 19, 2013

EU Policy-Makers Look To Future of Cyprus

"Guys, that's not Cyprus! Oh, I get it - another Nauru?" 

“MARKET WARNING”

What if your bank shut down, then gave 10% of your (and everyone’s) money to the government? This just happened in Cyprus.

Click Above

This deposit seizure is a very serious matter and  policy event that has far-reaching economic and investment implications on a number of fronts; as it sets a dangerous precedent for banks, brokerages, pensions, insurance companies and all other forms and shapes of financial concerns around the world. What happened in Cyprus, could it also occur anywhere in the world - as desperate governments are forced to take harsh illegal actions that violate all forms of commercial law, regulation, ethics and fair economic principles? Who can answer this question now?

Cyprus opens the door to a jackpot of issues that occurs when governments legitimize the outright theft of deposits and assets from bank accounts within their jurisdictions. This is theft of the worst form. For it undercuts the " Rule of International Law " and thereby all confidence in engaging in financial transactions with international bodies or their banking agents. Should this "illegitimate tactic" spread to other European jurisdictions, then the whole financial system could collapse in just a few days, as a panic moves from country to country - and therein; bank to bank. 

Let's remember too, that Cyprus is not a third world country under the control of a socio-pathic despot. Its actions appear to have the tacit approval of the EU and ECB. The implications of which place the whole European banking, brokerage and commercial system in "grave jeopardy"  - leading to a possible collapse in EU financial markets and systems due to fears of more deposit seizures.  

The amount, extent, and rippling effects of the theft of banking deposits or assets by any government is so devastating that immediate measures, sanctions and condemnations must come forward from all world governments, financial institutions and regulatory bodies. Or else we risk seeing the beginning of a wide-spread fear that has the potential to snowball out of control. 

Why? Because the question everyone will be asking is: Who's next? Italy? Spain? Greece? Ireland? Portugal? Savvy investors, banks, funds and institutions are sure to start readjusting their positions next week (many did over the weekend no doubt) before the markets open Monday and banks in Cyprus reopen on Thursday. We, hence, expect major outflows and realignments of capital out of marginal EU nations should no counter-measures be applied.

What Cyprus has done is completely unacceptable and thus harsh measures are needed to correct this violation or else the whole global financial system risks a collapse. The problem is that even if measures are taken to fix this immediately; it has created a "whole new fear or risk" in the minds of investors regarding the safety of funds in banks and institutions in Europe, - or perhaps everywhere. This is the last type of policy action one could imagine in such a fragile economic environment. Markets are sure to respond with deep concern.

This is potentially far worse than the crisis that was caused by the Lehman Bros fiasco and we have consequently issued a Market Warning to all our clients, readers and followers for this week. Of course, we will be following and commenting on events as they unfold.

   

So, we too say, "Be careful out there" 



INVESTORS' INSIGHTS
First Financial Insights
March 17, 2013 

GAME CHANGER - 

When Integrity is Lost 

INVESTORS' INSIGHTS - NEWS ALERT - "Russia Rebuffs Cyprus...

INVESTORS’ INSIGHTS
 

“NEWS ALERT ”

Russia Rebuffs Cyprus Bailout

Click Above for today's Globe and Mail Article

 

This is getting to be worse than the Wild,Wild West or the Lehman Bros. fiasco of 2008. Where was the EU and ECB oversight in the first place? Does the ECB, EU and IMF not have any regulatory metrics in place to detect or prevent such issues from ever reaching this stage?. Granted Cyprus is less than .2% of the EU's GDP, but still, could you imagine the US not bailing out Rhode Island? Or Canda PEI? The message would be clear: "there is no political union nor governing Central Bank". 

This is the absolute wrong message for the EU and ECB to be sending ,when they will be facing crisis after crisis in the months ahead. Bond markets should be shrivering, as these new frontiers are openiing unknown, unknowns with the potential to dominoe into the global system. Trigering the much feared rise in interest rates around the world.

Whatever bailout funds Cyprus had expected it needed, is now sure to be much larger as every depositor with a heart beat will be looking to withdraw their funds as soon as possible. Some sources say the Russians have as much as $65 billion on deposit, that they could be wanting to pull out the moment the bank doors open.on Tuesday. This could therefore get much uglier.

Is it the beginning of the end for the whole EU experiment? It does not look promising.

 

 

 

 

Investors' Insights

First Financial Insights

Comments

The Globe and Mail

Toronto, ON
March 22, 2013

 
 

 

Unknown, Unknowns

 

INVESTORS" INSIGHTS - "NEWS ALERT MARKET WARNING' - Cyprus Rejects Deposit Tax

INVESTORS’ INSIGHTS

“NEWS ALERT MARKET WARNING”

Cyprus Rejects Deposit Tax
Click Above for today's Wall Street Journal Article

No one voted for what could have been the most devastating economic policy action in over a hundred years anywhere. Wall Street Journal's article sets out further details and is linked above. With the rejection of this plan the country still faces major hurdles in order to avoid bankruptcy - whether a deal can be cut with the Russians remains uncertain. We are consequently withdrawing our stern "Market Warning", but will continue to keep an eye on events, particularly if Cyprus is the first nation to be forced from the EU due to its financial and economic mismanagement.

First Financial Insights

March 19, 2013

EU Policy-Makers Look To Future of Cyprus

"Guys, that's not Cyprus! Oh, I get it - another Nauru?" 

INVESTORS' INSIGHTS - "MARKET WARNING" - Cyprus Deposit Seizures Create More EU Fears

INVESTORS’ INSIGHTS

“MARKET WARNING”

What if your bank shut down, then gave 10% of your (and everyone’s) money to the government? This just happened in Cyprus.

Click Above

This deposit seizure is a very serious matter and  policy event that has far-reaching economic and investment implications on a number of fronts; as it sets a dangerous precedent for banks, brokerages, pensions, insurance companies and all other forms and shapes of financial concerns around the world. What happened in Cyprus, could it also occur anywhere in the world - as desperate governments are forced to take harsh illegal actions that violate all forms of commercial law, regulation, ethics and fair economic principles? Who can answer this question now?

Cyprus opens the door to a jackpot of issues that occurs when governments legitimize the outright theft of deposits and assets from bank accounts within their jurisdictions. This is theft of the worst form. For it undercuts the " Rule of International Law " and thereby all confidence in engaging in financial transactions with international bodies or their banking agents. Should this "illegitimate tactic" spread to other European jurisdictions, then the whole financial system could collapse in just a few days, as a panic moves from country to country - and therein; bank to bank. 

Let's remember too, that Cyprus is not a third world country under the control of a socio-pathic despot. Its actions appear to have the tacit approval of the EU and ECB. The implications of which place the whole European banking, brokerage and commercial system in "grave jeopardy"  - leading to a possible collapse in EU financial markets and systems due to fears of more deposit seizures.  

The amount, extent, and rippling effects of the theft of banking deposits or assets by any government is so devastating that immediate measures, sanctions and condemnations must come forward from all world governments, financial institutions and regulatory bodies. Or else we risk seeing the beginning of a wide-spread fear that has the potential to snowball out of control. 

Why? Because the question everyone will be asking is: Who's next? Italy? Spain? Greece? Ireland? Portugal? Savvy investors, banks, funds and institutions are sure to start readjusting their positions next week (many did over the weekend no doubt) before the markets open Monday and banks in Cyprus reopen on Thursday. We, hence, expect major outflows and realignments of capital out of marginal EU nations should no counter-measures be applied.

What Cyprus has done is completely unacceptable and thus harsh measures are needed to correct this violation or else the whole global financial system risks a collapse. The problem is that even if measures are taken to fix this immediately; it has created a "whole new fear or risk" in the minds of investors regarding the safety of funds in banks and institutions in Europe, - or perhaps everywhere. This is the last type of policy action one could imagine in such a fragile economic environment. Markets are sure to respond with deep concern.

This is potentially far worse than the crisis that was caused by the Lehman Bros fiasco and we have consequently issued a Market Warning to all our clients, readers and followers for this week. Of course, we will be following and commenting on events as they unfold.

   

So, we too say, "Be careful out there" 



INVESTORS' INSIGHTS
First Financial Insights
March 17, 2013 

GAME CHANGER - 

When Integrity is Lost 

Marc Faber, Peter Kinesa, Eric Sprott, Calcualted Risk, IMF

Investors' Insights:

Week Ending March 16, 2013

FIRST FINANCIAL INSIGHTS

"Investors' Insights"

Marc Faber Blog : The Market will push Interest Rates Higher

In this video interview with Marc he suggests that markets could push rates higher regardless of what the FED does. So far, the FED has been winning the war with the markets as it throws liquidity into the banking system. And as Marc observes, little has trickled into the real economy. Raising the question as to whether the bank bail-outs are still on-going?

Are Bonds in a bubble? Let's try some simple calculations assuming that in ten years rates will normalize back to 6.4% and inflation averages a modest 4.2% over this period. We will use 30 year treasuries that are currently yielding 3.2% on a simple interest basis.

Cash yield from $10,000 Bond @ 3.2% =    $320

Inflationary cost of holding @ 4.2%       =    $420   

Principal loss due rate mean reversion =    $500 

EXPECTED LOSS HOLDING IN 10yrs =  $600?

Wow! This means on a simple interest basis, the bonds pay a negative 6% a year, assuming a modest inflation rate and a return of interest rates to normal levels. This may be a best case calculation, as higher inflation rates are more likely to occur, with the pundits expected shortages in key raw industrial materials along with the climatic impacts on food and water costs. 

Anyway, something to think about along with using shorts on Bonds as an inflation hedge. Hmm.

Dr Peter G Kinesa

First Financial Insights

March 15, 2013

When will it Burst?

We cannot dispute the evidence but the collapse of  world powers and societies on the whole can related to a severe change and loss of the physical inputs needed by its economy. Monetary and fiscal policies failures are the symptoms and not the causes. Now think about what policy-makers are focused on today and you can see why the cure to economic troubles eludes them. They basically ignore physical realities and hold on to the stories of neo-classical economics. 

Peter is right, and Marc along with many others, have something to learn.

First Financial Insights

March 13, 2013

Marc Faber Blog -Worried about a Deflationary Collapse

What Deflation Looks Like

Flint, Michigan - 2013 

A deflationary collapse in asset values is 99% certain, because at some point markets will begin to demand real positive returns on market securities. But while an unprecedented asset value collapse is occurring, inflation will overtake the pricing of consumer goods. Things will cost more, assets will be worth less, currency debasement will accelerate, and shortages of key goods and services will be everyday occurrences. Confidence dies - creating social and political upheavals

Faber comments regarding why societies collapse demonstrates a lack of historical and scientific understanding. Very foolish. The collapse of societies has very little to do with fiscal and monetary policy, rather collapses can be attributed to a sudden disruption in physical economic inputs. This includes water, climate, food, or minerals and resources critical to physical survival. 

Great Empires also rise and fall, when their store of wealth and infrastructures have expired, largely because the return of physical goods from far flung colonies is less than the related physical investment and maintenance inputs needed to preserve a presence abroad. This starts a contraction process back to the originating country - that also finds, sooner or  later, it does not even have enough resources to preserve its indigenous population. These former Great Powers are now shifting into the later stages of the Nauru Paradigm.

Need examples? Soviet Union, Roman Empire, British Empire, Spain and so on. Also the list of societies that have collapsed due to an expiry in the resource inputs is also endless, ranging from the Mayans, Easter Island examples to small mining or manufacturing towns in Pennsylvania, Northern Ontario and England.  

Then, there is Flint, Michigan

Dr Peter G Kinesa

March 12, 2013

Marc, here's why societies really collapse.

  

Never too late to learn...

Eric Sprott: Central Bankers Are Gaming Gold - The Gold Report

For the most part, in the short term, Eric is probably right. First, Central Banks, Governments and Global Institutions have all been backed into a corner. He is absolutely right in saying that there is no wiggle room in terms of fiscal or monetary policy. So, Mr Central Banker - what to do? Dump assets - and, generally speaking the most liquid assets Central Bankers hold are gold reserves - thus, the suppression of gold prices.

The problem becomes: When will they stop dumping their reserves above or below board? There is no exact answer here. It could be in three months or it could be in seven years. Each nation and its Central Bank feels there own unique circumstances and will act as they see fit. We are thinking that the longer term dumping pattern will persist as all other measures have run their course. Most are also being constrained on the physical side, as industrial and agricultural commodity supplies tighten. That means, they cannot grow real economic activity to bail themselves out. 

So, instead of looking for long opportunities in Gold and other precious metals, positioning and levering up on the slam-dunk currency, stock and debt "short opportunities" looks to be the better bet both in the short (sic) and near term. And, by all accounts, there are lots of them. Plus, they are not subject to the same manipulative vagaries of government or Central Banks, that can blind-side your otherwise sound investment decision. 

Remember too, guys like Sprott, Faber and Rogers are coming across like promoters; rarely offering a balanced view. For example; Ten Great Reasons Not to Own Gold - that's an analytical dream. 

First Financial Insights

March 12, 2013

IMF Meeting:

"So how did they monetize their Gold?"

Calculated Risk: Tuesday: JOLTS, Small Business Confidence-

They are a number of issues we can take with comments that come from the mouths of pundits. For instance:

"In the 3 1/2 years since the Great Recession ended, real GDP has grown at a lackluster 2.1% pace and is tracking close to that pace in Q1 2013."      

Who said the Great Recession ended three and half years ago? Paul Krugman called it a Depression - he has yet to officially declare it is over. None of these guys seem to know what term  to use " Recession or Depression?" Who is confused?

That said, leads to the next point of contention - or better yet, confusion. What is Real GDP? Supposedly it is nominal GDP less the rate of inflation? However, the problem is no one really knows what the the real rate of inflation is? Rumour has it that the number is subject to political adjustments. More confusion. More BS.

Years ago economists focused on real per capita GDP. They don't anymore. Why? Because if they did they would have to report that we have been in a recession (depression?) for the past 30 years. That's a conclusion, based on our personal experiences, that  feels a lot closer to the truth. Just look at cities like Detroit, Buffalo, Newark, and so on. 

Another salient issue is that GDP should be split into two separate components  - "Hot Air GDP and Real Stuff GDP". This would be even more depressing; as the Hot Air GDP has certainly over taken all the real things that used to made here, but are now made overseas.

It is bad enough that the ship is sinking, but when your instruments indicate that "all is well - full steam ahead"; boy have we got problems. Confused?   

First Financial Insights

March 11, 2013

 Hot Air - a paradox with a whole new meaning...

Feeling left out?

Dr Peter G Kinesa : Feeding the Dragon:Why China's Credit System Looks...

: Feeding the Dragon: Why China's Credit System Looks Vulnerable click above THE BIG MAMA OF ALL CREDIT CRUNCHES This article refle...

Gotta feeling that when economic and market pullback ultimately occurs, a lot of folks will be caught swimming naked. Key words like transparency, accountability, corruption, excess leverage, and oppression are amoung those words that resonate strongly in our analysis - smoke generally leads to a fire.

At the same time, throwing BIG MAMA off this runaway train is next to impossible. So we believe when it hits the bottom - the collision will be devastating, prolonged and deep. Something will have to change.

First Financial Insights
March 10, 2013

That's Some Credt Crunch Coming