INVESTORS' INSIGHTS - Peter #Kinesa #JimRogers #EricSprott #FDIC

 

INVESTORS' INSIGHTS:

Week Ended August 4, 2013

FIRST FINANCIAL INSIGHTS
"Investors' Insights"

 

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US BANKS HUGE PROBLEM PERSISTS -Unofficial Problem Banks - FDIC Report

(Read More)

 

Hmm ... Emerging Pattern?

Despite how others are interpreting the latest figures, reported by the FDIC - we do not share their same enthusiasm. In fact, we have grave concerns, as the pattern appears to mimic the one experienced during the credit humbling days of the Great Depression. Here are some numbers to consider.

 

In Q2 2009, nine months after the meltdown, only 4.7% of the 8,195 insured banks were classified as problems. By the second quarter of 2012, the percentage rose to 13.3% of 7,513 insured creditors - at the same time, over 600 banks had vanished for a host of reasons. Today, we are looking at a figure of 10.3%, on a total report of 7,018 insured banks. Now these percentages do look somewhat comparable, in shape, to the 1930-32 period graph for bank failures, prior to the big collapse of 1933. Spooky.

 

Add to this numerical and graphic analysis, the fact that we have seen an extended period of monetary and quantitative easing, that has not seen benefits flow down to the Main Street banks. Disturbing! These banks are indeed no where near the numbers reported just nine months after the great 2008 meltdown - 4.7% to 10.3%. Meaning the problems have not been fixed to any great extent by policy measures, so far.
 

But could there be another 1933 in a year or two? The odds are good that a further market and credit meltdown is in the cards. First, because policy has had very little impact on the credit system's organic health; and secondly, a rise in interest rates would deflate financial and property assets, and thereby wipe out much of the equity in an already problematic and highly levered system. Thirdly, let's not forget that the global economy is fragile and exposed to contract widely with minor tremors.
 

These numbers and analysis are forewarning, so it would be wise for policy-makers to have the toxic-asset bail-out (disaster) plans in place well before events transpire, breaking the bank machine. But, should we ever expect them to Think ahead? Perhaps as 2008 indicates, the idea is just too novel.
 

Investors should also take note that another credit crunch is, not only terrrible for markets, but also the domestic economy, as the banking system that is even numerically weaker than it was back in 2009, cannot quickly act to stabilise both activity and valuation contractions. Meaning that the breach in valuations could also be much greater than the September 2008 meltdown losses, as market liquidity is also more susceptible to rapid tightening with weaker banks.
 

To close, analyse and draw your own conclusions, but we cannot help having this sinking feeling inside - there is something in the Autumn Air.

INVESTORS' INSIGHTS

First Financial Insights

August 2, 2013

When the bank machines are broken, expect...

The Jim Rogers Blog : WE ARE IN BIG TROUBLE! - There is a huge artificial Boom (video)

We are right behind Jim on this issue and recommend reminding yourself often and keeping an eye the ball, not getting caught when the trap collapses.

INVESTORS' INSIGHTS

 

This is beginning to sound like a chorus line with a song that sings about the coming collapse of almost every kind of asset value. We recently commented in The New York Times that values could collapse by as much as 50% should long rates rise by 2% or more. Readers got mad at us, but it's not our fault, because we did not invent financial mathematics - someone else did! Nor we do believe that these rules are open to negotiation, legislation or persuasion of any kind. They are absolute.

So how did we ever get backed into this corner? Well. you can blame the usual suspects, who lost sight of common sense and were "influenced by the political immediacy of their times." Now there is no where to run or hide.

INVESTORS' INSIGHTS

First Financial Insights

August 1, 2013

Remember these guys - Unusual Suspects?

The Eric Sprott Blog: HA! HA! - There is a Serious Shortage of Gold - (Read More)

"I think it’s just been one big scheme to try to get people dissuaded from owning gold and to cause supply to come out. As you mentione...

So do want to buy our new book - with over 1 million pre-sold copies? The title is "The Secret to How to Make a Lot of Money Real Quick"; - write a book like this.
 

Sarcasm notwithstanding, Eric is basically a promoter and should disclose his personal, corporate and managed positions, so it is clear where he is coming from and fair to everyone who listens to his pitch. As well, to make this relevant for serious investors - sources, numbers and opposing views should be brought forward for objective analysis. We strongly believe, moreover, that if this was such a great investment, folks like Buffet, Bogle, Gates, Goldman and many others, would all be quietly chasing this huge home run. There is little evidence suggesting they are swinging at the plate.

 

In the meantime, we will continue to support the belief that gold is a psychotic placebo, that has lost substantial real purchasing power over the past 33 years, as well as being the one of the worst asset classes over that time. Making it just a speculative relic used by barbarian traders that holds none of the attributes true investors desire - like expected or defined returns.
 

Bottom line, we are not putting much faith in the rhetoric of gold promoters like Faber, Sprott and Rogers. For as Charlie Monger would say, "if its too good to be true, it usually is "

INVESTORS' INSIGHTS

First Financial Insights

July 31, 2013

Our Message..

These wise guys are not "Gold bugs" for a reason -

The Dr Peter G Kinesa Blog: ECONOMIC GRAPH OF THE DAY: UK Wildlife Index Decli...: (Read More)

ECONOMIC GRAPH OF THE DAY: UK Wildlife Index Decline (1968 -2010) To the point, forget about all the graphs, ch...

You may think that Peter's comments are absurd, outlandish or just plain funny from an investment, finance and economic point of view. We, on the other hand, view such measures and observations quite seriously. So much so, that in the end we believe that one his upcoming books "Bugonomics - The Silent GDP of Bugs" will far out pace Freakonomics as a best seller.
 

Bugs by their nature are existentialists, just as Pete's Economic Doctrine plants itself in this philosophic foundation. For when man is gone, what happens to Bugs? Or is the question worded backwards? Hmm.

Read the book...

INVESTORS' INSIGHTS

First Financial Insights

July 30, 2013

BUGONOMICS - The Silent GDP of Bugs

 

 

INVESTORS' INSIGHTS - #Bloomberg #Aljazeera #TheNewYorkTimes

INVESTORS' INSIGHTS:

Week Ended July 21, 2013

FIRST FINANCIAL INSIGHTS
"Investors' Insights"

VISIT OUR WEBSITE

www.pwa2100.blogspot.com

The Marc Faber Blog: Somewhere down the line we will have a Massive Wealth Destruction

Just a short post noting that Marc's 50% prediction is in line with what we suggest is a possible valuation adjustment in our July 17th comments on Paul Krugman's Blog - Prophecies of Maestrodamus.

Not a hard one to figure out as it is really just "present value mathematics" whereby if long 30 year bond rates double, then their market value dips by 50%. Very straightforward mathematics that no amount of economic theory nor policy measures can override as it is simply a hard conceptual constraint. Mathematics cannot be persuaded, legislated nor negotiated with - and that should come as no surprise to anyone.

Down the line, looks to be a scary turbulent road ahead. 

We will post more comments from this blog later on.

INVESTORS' INSIGHTS

First Financial Insights

What waits down the line?

Bloomberg BusinessWeek - The Social Media Bubble is Quietly Deflating

Just a few months back, you may recall, along with Jim Rogers, we raised concerns about Facebook and generally the whole social media industry, referring to it as a generational fad and having difficulty seeing how a sustainable business model could be developed. Moreover, whether such tools or derivatives could find useful and profitable transitions into business markets. Guess what? Looks like the markets are tuning into Mr Rogers and ourselves as VC (Venture Capital) funding has plummeted to 2% this past quarter.

As one insider notes; what a business - "thinking about how to make people click ads"  And that pretty well sums up the industry's "Critical Success Factor" and how you build any sort of Sustainable Competitive Advantage around it, remains a puzzle.

Anyway we still believe that the big ticket, high margin objects just simply requires good ole face to face contact -  a little of that human touch!

INVESTORS INSIGHTS - February 18, 2013  

JIM ROGERS - Facebook is not an Investment, it's a Waste of TIME  

INVESTORS' INSIGHTS

First Financial Insights

July 20, 2013

Not a Happy Camper

Bloomberg - Spanish 10-Year Bonds Decline as Italian Yield Rises to 4.48%

In light of our market alert, regarding Portugal's Bonds, earlier this week, along with the growing concern for adverse circumstances in Europe, even more focus is now being given to European Bond Markets. Market activity in these markets may now have greater bearing on the global financial system than US treasuries. No kidding?

Similar to Japan, bond values and rates in the US appear to be hand-cuffed at low levels for some time. Moreover, enjoying the reserve currency status allows the US to gather the loose liquidity in the global system and harbour its flight and fright capital, thereby easing any upward rate pressures. Plus, an interest rate increase state-side would be absolutely devastating to the US economy at this juncture - and just pour gas on a stumbling economy's fires. 

Underlying the European bond markets are chronic diseases that  show no signs of abating - in fact there is growing evidence to the contrary. Like Japan and Middle East countries, Europe suffers from a physical economic overcapacity issue that cannot be resolved by abstructionist economic measures. Limited and declining physical economic inputs can only lead to one result - declining economic outputs. All of which is made worse as populations grow and per capita output consumption ratios thusly sink even further. Bad "Real" News!

Particularly after Cyprus, we are seeing signs of desperate central bankers pulling out devious last stops to cure the terminal economic cancer. The markets in Greece, Spain, Italy, Ireland and Portugal are at the greatest risk of crashing global bond prices. They are "bonded" by a common concern with a staggering rippling potential affecting markets with traumatic head to toe  effects. 

Our main message here - this one ain't over yet; 'cause, "it ain't over, 'til its over"  

INVESTORS INSIGHTS

First Financial Insights

July 19, 2013

A Bonding Crisis - the future is yet to come...

The New York Times 

The Prophecies of Maestrodamus

Paul Krugman

Comments as published:

"I know one thing; that I know nothing" Hmm. I think we could all learn from one of Socrates’ last thoughts - but you never know!

Still we could attribute much of our current mess to too many who believe they know - then later we find that even simple notions were somehow forgotten. Or a fog had set in. (- R. S. McNamara).

Despite what may be economic headlines today, Greenspan's legacy may be his contribution to our current low interest rate trap - that has lasted for much too long. Getting out of it could trigger a massive deflation of financial assets - causing an unprecedented ASSET VALUE WRITE-DOWN. Evaporating years of value in moments.

A mere 2% rise in rates, for example, could deflate financial assets by as much as 50% - wiping out the equity boxes of financial intermediaries and banks , while creating massive unfunded pension and insurance fund liabilities on the basis of marked to market accounting calculations. =ing HUGE liquidity CRUNCH.

Moreover, the total value of US federal debt could grow substantively with a mathematical pen stroke, which has little to do with deficits or economic theory and activity. And I don’t even want think about what could happen if rates should revert to levels over their historic mean; it would be devastating.

So it seems that the Maestro knew how get us into this trap, but did not know how to get us out of it - but then again "who knows?" And as far as we know, he's still on first...

INVESTORS' INSIGHTS

Juky 17, 2013

I don't know?

ALJAZEERA - (English) Worldwide PC sales keep sliding

Lenovo (China) Top PC Maker???

Bad news for everyone, except China as they take the leadership position in another market that has long been dominated by American makers for decades. Who do we blame this on? Management? Tablets? Consumers? Or China's low cost producer strategy for an industry where products are becoming commoditized, as it really does not take that much to do the reverse engineering. Again China is following a "national business strategy" much like Japan did from the 60's onwards in automotive and consumer electronics.

But the real issue is what good is the WTO? How does it ensure that everyone is on an equal playing field when labour, environmental, and health standards are barbaric is contrast to North America. Add to all that a fixed currency to the US dollar and this game becomes a one horse race.

But who loses big time? North American and European union and salaried workers. In fact, in America the real hourly wage, according to St Louis, FED statistics have not risen much since 1982! So, where are the unions???

Beyond all this meaning more doom and gloom for the ordinary American worker, here 's list of PC makers facing tougher times as this saturated market begins to consolidate. Smaller players will be forced to merge or simply fade away into the sunset - while margins face continued presures from commoditization.

TOP Five PC Makers

  41% (est) Market Share

Lenova

Hewlett Packard

Dell

Acer

Asus

INVESTORS' INSIGHTS

First Financial Insights

July 16, 2013 

Those were the days - "in our home towns... and they ain't coming back"

- Bruce Springstein

The New York Times, Marc Faber, Peter Kinesa, Eric Sprott, Pierogi Farms

Investors' Insights:

Week Ending March 9, 2013

FIRST FINANCIAL INSIGHTS

"Investors' Insights"

Marc Faber : The Financial System will go Broke within the next 3 to 10 Years

When the markets look like they're ready to take a big bull run up hitting peaks, its a good time to refresh your thinking - at least to provide some balance - with a few words from Dr Doom. So here is his very popular video from last year forecasting a break down within the next 3 to 10 years.

Our predating post - Economic Collapse 2020 - A Failed Theory - pretty much says the same thing with a similar time line. Coincidence? Not really, its a calculated bet based on trends in resource inventories, inflation and simple mathematics. When rates move from these all-time historical lows they will bring asset values down in a blink of an eye. Thus all vavcation plans should also include a move to cash while your away - otherwise, you may not be coming back.

First Financial Insights

March 7, 2013  

Feeling a little high? Let Dr Doom help - 

Watch my video 

Dr Peter G Kinesa : The New York Times - Euro Zone Reports Record Jobl...:

The New York Times - Euro Zone Reports Record Joblessness Rates and Low inflation Place your bets! For some reason I think that both numbe...

Who will lead Europe? 

Reading between the lines,  I think Peter is saying that we should keep an eye on this Cardinals' Conclave - it could have serious political-economic consequences. 

Ever wonder if the Vatican keeps pictures such as this in their archives, just to remind them of their morale fortitude in the face of evil and personal danger? So few can ever reach the higher ground, when there are words - and words will determine the course of human existence. Pray they are the right ones. For words resting in the wrong hands are more dangerous to human enterprise, more dangerous than any arsenal of weapons ever assembled by man.

"It's not the facts that count, its the interpretation" - Winnie    

First Financial Insights

March 6, 2013  

Eric Sprott Blog: Canada Has NO Gold:

Eric Sprott discussing the complete lack of gold reserves that the Canadian government has. Start stacking Canada! End of the Road: H...

That's a good thing. Eric clearly needs a few lessons in Meta and Macro Economics, including an understanding of the Nauru Paradigm Cycle. First, what type of countries require large Gold reserves? Well, of course, countries on the verge of physical bankruptcy - meaning they have virtually exhausted all their non-renewable and renewable resources - hence, they are entering the last stages of the Nauru Paradigm. Gold is the last stand for these desperate countries, providing one remaining lifeline to deferring the inevitable collapse of their economic, political and social complexes. But, Gold can only relieves such symptoms temporarily - it does not fix or cure the underlying economic malady. 

By the way, most countries entering this final phase of the Nauru Cycle can expect two outcomes: increasing social unrest and growing external hostilities. This is a historical fact, but it is also reflected on today's geo-political stage. Consider Syria, Egypt, Iran, Greece, France, Japan and many others (China?) - all are nations entering the final stages of the Nauru cycle - where physical resources per capita are in rapid decline.  Expect More Wars.

Canada, on the other hand,  is invariably the richest country in the world given the vastness of its resources and infrastructure complexes. Its per capita resource/currency ratio is second to none, given its relatively low population.The last thing Canada needs is more Gold - it has enough in the ground in the event of need. Yet, there's more...

More reasons why Canada doesn't need Gold reserves? 

First; in a few short years, Canadians will be able to pick it up tonnes of Gold on the cheap, as last stage countries in the Nauru survival mode are dumping their reserves to finance wars; stay social unrest or ensure departing dictators have their retirement assets available in the right places, after political life. (Dictator's Survival Guide: Zurich Gnomes 101) .

Second, for the reasons mentioned, Canada's currency is trending upwards under immense long-term pressures, so the last thing it needs are measures that could be perceived to strengthen this sleeping giant of global currencies. It would not surprise us to see the Canadian dollar rise to $1.50 US in five years, and climb further to $2.00 in ten or less years - particularly when the FED's exponential, on-going debasement of the greenback is taken into account. This the price to be paid by the US for running its fiat currency presses 24/ 7. Meanwhile, these fiat currency presses, allow the  US  pay debts with paper IOU's, knowing that any debt repayment in physical currency forms is impossible (not enough OIL in the world?) - this paper chase cannot; however, last forever.  People figure it out, sooner or later.

A patient Canada is sure to be a BIG Winner in the Gold game down the road; albeit, a meaningless win when critical global resources are practically depleted or unusable. Mr Sprott needs to revisit his Meta-Economic books and refresh his understanding of the deep implications of the "Nauru Paradigm Cycle."

It goes without saying, that the Canadian dollar is a great surrogate  play on hard and soft commodities (including fresh water), both of which have more real upside in the coming years. Rogers, Soros and Faber think these commodities are too. Gold is a more speculative strategy - we prefer the elements offering real economic utilities - not golden abstractions from OZ. 

From Behind the Wizard's Curtain,

First Financial Insights

March 5, 2013 

Nauru Paradigm - when there is nothing left!

"Hey guys, that's not Nauru ??? Oh, I see?"

Marc Faber - "SELL EVERYTHING" - A Correction Could Start Any Day

Worth watching Marc dodge Maria's skeptical questions in this CNBC interview. We are not  being as analytical as Dr Kinesa's in his post today about the mathematics and logic of everything. In fact, we go along with Faber and Kinesa  foreseeing stormy markets ahead as we plow through this  "Ice Age " in valuations trapped by rates being too low, for too long - with no easy way out of the trap. 

When you listen to Dr Doom and the best bets he can put forward are the Ukraine and Viet Nam; you get a real sense that things are pretty tough. He does like the resource sector, but does not point to any specifics. Technology stocks are also on his watch list  - have consumer gadgets and applications peaked?

Who knows as consumers, according to recent studies, certainly do not seem to be as concerned about the environment anymore - that puts a damper on green tech as well.

Oh well, who has a retail pierogi farm or franchise for sale? 

First Financial Insights
March 4, 2013

Pierogi Farms Cheap!  - Exceptional South Kiev Investment Properties

$50,000 US - 10 Acres

Contact Ivan Jureychuck

Cabbage Roll Farms Realtors 

Bernie Madoff, Marc Faber, Jim Rogers, Peter Schiff, Eric Sprott

Investors' Insights:

Week Ending March 2, 2013

FIRST FINANCIAL INSIGHTS

"Investors' Insights"



Marc Faber - 2013 Gold Price Prediction

Now this video gives us a little insight into why he is carrying so much Gold in his own portfolio -25%. So now, you can see why he is so eager to have us buy more and protect his position. Otherwise, if we do the opposite and sell all our holdings - then our poor Mr. Faber faces unkind losses and embarrassment. All this could also lead to a career change for our dearest unbiased advisor.

By the way, will you tell us Marc when you decide to sell or reduce this position before you actually do? Hmm...

Madoff get back in the cage -

First Financial Insights

March 1, 2013 

Believe me, I told you 25% is in Gold

Home Sweet Home

Peter Schiff Blog: Video: The Real State Of The Union:

 Video Summary: The real state of the US economy; Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is t...

Here's Peter at his finest. Now let's do a straw poll here, does he make any sense? You're right he doesn't, as like most in this sales practice filled charlatans, they focus primarily on short-term abstracts and situations. Never do we get to the real problems causing the bloated debt, climatic chaos and financial tipping point.

Consider this,within the next ten years there will be less food, water, energy, and minerals, but more gold, pollution and people demanding more of the less food, water, energy, and minerals.And with each subsequent ten year period it will get much worse, until we actually run out of almost everything.

Beam  me up Scotty...

First Financial Insights

February 28, 2013

Peter, thanks for your thoughts and advice.

Marc Faber : Buy Gold To Protect Against The Next Crisis - Dr. Peter G Kinesa

Not really by design, but this week the two themes at "Investors' Insights" are quite similar, even in spelling: God and Gold. They both promise miracles and value forever. These assertions are not subject to object tests of quantum information, and thus fail to meet the burdens of proof needed to judge their on-going existence as scientific truths.You are, thus, left to your own speculative devices.

Peter is absolutely correct in pointing out that gold is not insurance against systemic risk - we believe any educated mind can easily understand the mathematical and physical reasons fairly quickly. However, it is beyond us why Marc said this, and Peter is being a little tough with his remarks. That's Peter.

To be clear, it is impossible for gold to insure systemic, nor does the belief in the other one, insure you absolute entry somewhere forever  over the rainbow.

First Financial Insights

February 27, 2013

Marc Faber : Buy Gold To Protect Against The Next Crisis - Dr. Peter G Kinesa

Oh My Gosh! Why all the Bugginess over Gold? It does nothing for our real economy, nothing to assure our on-going subsistence and expends currency from the real wealth of the planet. A net negative to planetary wealth.

Marc in this telephone interview is again taking on a senior role at the Pearly Gates, by saying or suggesting two things. Gold is insurance against systemic risk. And investors should hold up to 25% of their portfolio assets in gold. There is no way on earth that he can predict or state this just based on past events. The future is filled with a vast number of permutations, as regards the possibilities and possibilities of outcomes. One is that the price gold collapses more that everything else for any number of reasons. To say gold is some form of insurance against anything is - JUST PLAIN STUPID!

That said,obviously the 25% gold allocation is also not so wise for non-speculative portfolios.

When the crap really hits the fan, folks are going to be thinking more about gas, water, food and medicine. Things get pretty basic.

But let's not get into the prediction game here.

Dr Peter G Kinesa

February 26, 2013

" Peter, Gold Is Insurance Against Systemic Risk!" - GOD

Jim Rogers : Gold Is Overdue For A Nice Correction

Yesterday we published, commented and provided the link to one pundit's (Eric Sprott) video regarding the price of Gold. Now here's Jimmy, more or less saying "hey guys, this is too good to be true".  We would guess his opinion is a little less biased and closer to the probable outcomes that lie ahead - classic reversion to mean. But it is also remarkable, to see how two leading pundits differ. Such are the markets.

Still, as we said yesterday, even God knows he is not a Gold Pundit. Nor are we.

First Financial Insights

February 26, 2013

You decide?

Eric Sprott Blog: Is the West Dishoarding Its Sovereign Treasure?: 

Chris Martenson of Peak Prosperity interviews Eric Sprott of Sprott Assets. This interview occurs during the recent smash down of gold ...

This is not a asset category that we generally hold an on-going opinion on. First, the idea that gold is the last store of value is a preposterous idea in our "scientific economic modelling" having no relevance whatever to sustaining human existence. Gold's value is thus an abstract construct, and not a concrete construct for purposes of object scientific analysis. John Maynard Keynes also refused to entertain it as have any meaning to real economic activity. Rarely do we ever agree with Keynes - he had his flashes of brilliance. 

It is simply an element extracted from the planet that is a bit more attractive looking than others, so it must logically have more value. This group think " beauty in the eye of the beholder" has a long history. But history will never predict the future, it simple allows for the setting of possibilities and assignment of probabilities.

So we would agree with the Central Bankers who are quietly unloading their inventory,while trying sustain these high price levels for as long as possible. Gold's price, because of its speculative nature, could collapse at any time for whatever reasons - to $1000 or even $500 per ounce. And, not return to these price levels for years. One thing we can guarantee for absolute certain: neither the Central Banks nor Eric Sprott knows for sure. And we know that we certainly do not know. " No one does in reality."

Most importantly,the difference between Gold Pundits and God. God knows he is not a Gold Pundit.

So why have regrets, particularly when there is enough gold above ground for 400 years of industrial production, while oil runs out in about 40 years. Then good luck, in 2055 or 65 in exchanging that ounce (ton) of a pretty metal for a fruits and vegetables basket. 

First Financial Insights

February 25, 2013

How many tons of gold per basket in 2065?

Not even God knows for sure...