Tuesday, May 17, 2011

GEAB 55: Explosive fusion of world geopolitical dislocation and the global economic and financial n crisis in H2 2011

Here are the highlights of GEAB 55 (May 2011) entitled "Global systemic crisis - Confirmation of a Major Alert for the second half of 2011 – Explosive fusion of world geopolitical dislocation and the global economic and financial crisis":

  • After Fukushima: The six essential features of the revolution in the nuclear power decision-making process for the 2010-2020 decade
For the sake of completeness, the title of this exercise in political anticipation applied to nuclear power should also include two other factors besides Fukushima, namely the Internet and the global energy crisis which is one of the elements of the global systemiccrisis we are experiencing. In effect, it is the combination of these three factors which, according to LEAP/E2020, radically and permanently alters the whole decision-making process on nuclear power that we have known since this source of energy took its first steps after the Second World War…

  • Global systemic crisis - Confirmation of a Major Alert for the second half of 2011 – Explosive fusion of world geopolitical dislocation and the global economic and financial crisis
Our team confirms in this GEAB issue that all the conditions have now been met for the second half of 2011 to be the stage for the explosive fusion of two fundamental trends underlying the global systemic crisis, namely world geopolitical dislocation on the one hand and the global economic and financial crisis on the other… Read public announcement

  • Increasing market volatility and weakening of their « powerful operators »: The case of the silver and commodity markets
  • When Athens aims to hide London and Washington
  • The Battle of Frankfurt or the final attempt to turn the ECB into a satellite under the influence of Wall Street and the City
  • Barriers, security, export embargos, diversification of reserves, frenzy over commodities, widespread rising inflation ... the world is preparing for a new economic, social and geopolitical shock - Read public announcement
  • Strategic and operational recommendations
Gold & Precious metals, Currencies, Basic foodstuffs and energy, Financial markets, Nuclear
  • The GlobalEurometre - Results & Analyses
We see an increase in the majority of respondents (63% in May versus 59% in April) who consider that Eurozone economic governance will not be established by the end of 2011. Even though Euroland has asserted itself as a reality within a year, it’s clearly the lack of a governance structure which fuels this contrary to reality opinion...

Thursday, May 12, 2011

Jeremy's Grantham Quarterly Newsletter Q1 Part 2

After explaining with he thinks we are in a paradigm shift in the commodities markets earlier last month, Jeremy Grantham published the second part entitled "Time To Be Serious (and probably too early) Once Again".

Here are the key points:

* US Stocks are overvalued by over 40% (Fair value for the S&P 500: 920) based on GMO methodology
* Year 3 is generally good for stocks, but there are many uncertainties including whether QE3 will be enacted
* He doubts the market can reach 1500 by October 1
* Now is not the time to float with the FED, but to fight it.
* GMO increased Japan equities positions are the market seems undervalued
* High Quality Stocks outperformed small caps since March 31: +5% vs -1% as expected
* Long Term recommendations: Forestry and agricultural land

Saturday, May 7, 2011

Jim Rogers: Where is the oil ?

Three parts interview of Jim Rogers on CNBC on the 5th of May 2011 about his views on the oil market, precious metals and the Euro.

Tuesday, May 3, 2011

Marc Faber May 2011 Market Commentary Summary

Marc Faber has published is May 2011 market commentary entitled "I Used to be an Idealist, then I was a Realist, Now I am a Pessimist". Here are the highlights provided by WallStreetPit:

1. Equity Markets–The markets may be giddy about stocks hitting new highs, but contrarian investor Marc Faber is having nothing of this. He is concerned that stocks will fall sharply in May and that the recent breakout in stocks will prove to be trap for the bulls. The markets are due for a correction and the technicals point to a weak market. In particular, Faber points to the decline in new 52 week highs as evidence of an unhealthy internal market. Right now, Faber would stay away from cyclicals, tech stocks, and banks. If you have to own stocks make sure it is something safe like consumer staples (MO, JNJ, PEP, KO, etc).

2. Gold & Silver—Still likes gold as a long-term investment and recommends dollar cost averaging every month regardless of the price. However, when it comes to silver, Faber is more cautious, noting the recent run-up in the price. He expects a 20%+ correction in the metals complex because the inflation trade has become too crowded.

3. Commodities–Dr Copper is issuing a warning to investors. While the S&P 500 has made a new high, copper failed to do so (non-confirmation). This is a significant development because Dr Copper and the SP 500 have a very high correlation. This signal, along with the large declines in other commodities such as sugar and cotton, leads Faber to believe that stocks could follow commodities lower (in the short-term)

4. Buy Housing–While Faber thinks the US housing market has another 10% to fall, he would be a buyer because of attractive valuations. Faber compares the price of US housing to gold and concludes that housing has not been this cheap since the early 1980′s. But do not think there will be a quick recovery–there won’t be. The main point about housing is that it is a good inflation hedge and will likely keep its purchasing power of the next 10 years. In a serious inflation environment, Faber would rather own housing than paper dollars.

5. More QE Guaranteed–In Faber’s opinion, QE 3 is a near certainty. The US will be running trillion dollar budget deficits for the next 10 years. There is no way they can finance all of this through bond issuance. The Fed will have to at least partially monetize this to keep interest rates low.