January 2012 Monthly Archive

Reader Mailbag: “Two words for delusional China bulls: PER CAPITA”

We got some good feedback from our article on Friday. Below are a few reader comments and our responses. Enjoy. (And keep the comments coming.) Read more

Two words for delusional China bulls: ‘PER CAPITA.’

When I hear someone mention China in the midst of a political discussion aimed at understanding our future economic path, I shake my head. Read more

11 reasons that justify the Federal Reserve’s monetary policy

Once the government stops increasing the quantity of dollars artificially or even slows down the rate of artificial increase in the quantity of dollars, producers supplying goods and services to the spenders of newly created unearned dollars lose a large number of their customers. Read more

Japan’s 31-year winning streak breaks. (That’s likely not good for global liquidity.)

Interestingly, the news that Japan has finally recorded its first year-on-year trade deficit since 1980–ending an incredible streak of 31 years of surplus (the Miami Marlins, formerly known as the Florida Marlins, could use some of that magic)–fits into the theme of falling global liquidity. Read more

ECB and IMF lift spirits. One Question: Who backstops the backstop?

I recently succinctly summarized my view of stocks with the Wily Coyote analogy. I got one very good succinct comment, and I am paraphrasing; I agree with you Jack but you have missed a lot of profit along the way. I can’t argue with that. Neither technically nor fundamentally did I expect stocks to break above intermediate-term highs, measured by the S&P 500 cash index at 1292 back on October 27, 2011. But we sure have. Read more

Iran, China and Crude.

While China is by no means the only large consumer of crude oil, the country’s growth trends have been reason enough to be bullish. Read more

Gold and its connection to China’s social unrest

Throughout much of the last two to three years, a key component in our analysis has been the simmering social tension and the potential for one of hundreds of thousands of “mass incidents” occurring each year to escalate beyond the control of Communist Party officials. Read more

Is recession dead ahead? If so, it is Wiley Coyote time!

I think we are nearing a major Wiley Coyote moment for Mr. Market. Despite recent joy over some of the economic numbers, recession in the US is still very much in play; if so, S&P 500 Index and Crude Oil, seemingly joined at the “risk on” hip joint, seem extended, to say the least. Read more

Mrs. Merkel, it’s basic math. And you know math!

Michael Pettis is a professor at Beijing University, and one of the best global macro analysts out there, in my opinion. His recent piece, titled, “If no trade reversal now, then when,” should be required reading for anyone who wants a clear summary of Eurozone problems without becoming mired in all the stuff of breaking news. Read more

Careful Mate! Ti…ti…timberrrrrrrrrrrrrrrrrrrrrrrrrr………..

Quotable The Morning Star paled slowly, the Cross hung low to the sea And down the shadowy reaches the tide came swirling free. The lustrous purple blackness of the soft Australian night Waned in the grey awakening that heralded the … Read more

The Gold Chart Appears Parabolic to Me! FIL disagrees…

Hans, a middle-aged German tourist on his first visit to Las Vegas, finds the red light district and enters a large brothel. The madam asks him to be seated and sends over a young lady to entertain him. Read more