Ah, Saudi Arabia, land of heat and contradictions. One day they’re jailing women’s rights activists for wanting to drive, the next day they’re dismembering still-living Washington Post journalists. And yet they can count the world’s capitalist democracies as friends, because today’s dysfunctional economic/geopolitical system depends on both Saudi oil and Saudi willingness to keep their […]
Last Week Was Just A Taste Of The Coming Gold Short Squeeze
The gold and silver futures markets got even more unbalanced last week, with speculators (who are usually wrong at the extremes) going as short as they’ve ever been and commercials going even more long. Here’s the gold data in chart form: These are historically huge imbalances that – if the action in the paper markets […]
Rising Interest Rates Start Popping Bubbles — The End Of This Expansion Is Now In Sight
Towards the end of economic expansions, interest rates usually start to rise as strong loan demand bumps up against central bank tightening. At first the effect on the broader economy is minimal, so consumers, companies and governments don’t let a slight uptick in financing costs interfere with their borrowing and spending. But eventually rising rates […]
Notice How Quickly Market Psychology Changed?
“How did you go bankrupt?” “Two ways. Gradually, then suddenly.” ― Ernest Hemingway, The Sun Also Rises On the surface, nothing much changed last week. The Fed, as expected, raised short-term interest rates very modestly, the US, Canada and Mexico cut a new NAFTA deal (kind of a pleasant surprise), unemployment fell again, Trump continued […]
US Interest Rates Are Spiking Again: Why This Is A Huge Deal
This morning’s jobs report was stronger than expected, which – combined with Amazon’s dramatic increase in its minimum wage to $15/hr — implies rising wages going forward. The bond market reacted as you’d expect to the prospect of higher wage inflation, with the yield on 10-year Treasuries hitting its highest level in five years. This […]
Another Trillion-Dollar Unfunded Liability, Part 2: Running The Hurricane Numbers
The idea that as more people move to Hurricane Alley and other storm-prone places, the future cost of those storms will rise – and that we’re not accounting for that future cost and are therefore likely to be shocked by it – makes intuitive sense. Now some recent studies have fleshed out the numbers, making […]
Italy Calls Europe’s Bluff — And The Euro Loses Either Way
When Italy elected a bunch of rowdy populists back in March, the rest of the eurozone assumed (or at least hoped) that the weight of responsibility would bring Rome back into line. But so far the Italians appear to be serious about ending austerity and forcing the ECB to finance their spending ambitions. The just-passed […]
12 Rules For Investing In Junior Miners
Stock discussion boards can be exhausting places, with nuggets of wisdom and occasionally actionable information buried in mountains of invective and aimless meandering. But the nuggets are sometimes worth the search. Here — courtesy of a poster called doourdiligence — are 12 rules for junior miner investing that would, if followed, make the sector a […]
The Fed’s In A Box And People Are Starting To Notice
It’s long been an article of faith in the sound money community that the Fed, by bailing out every dysfunctional financial entity in sight, would eventually be forced to choose between the deflationary collapse of a mountain of bad debt and the inflationary chaos of a plunging currency. That generation-defining crossroad is finally in sight. […]
Marin Katusa’s Top Gold Miner Takeover Candidates
Commodities analyst Marin Katusa makes a compelling case that regardless of what gold does in the near term, some miners are likely to be bought out at nice premiums to current prices. Here are two of them: The Right Price: Are Pretium Resources and Detour Gold for Sale? The gold market is in a funk. […]
Why We’re Ungovernable, Part 15: Germany’s Merkel Demoted To Figurehead
You don’t see “Germany” and “ungovernable” in the same headline very often. But that might be about to change, as Chancellor Angela Merkel, for the past decade the central pillar of Europe’s Establishment, loses influence both at home and abroad. First came a wave of populist (read anti-euro, anti-austerity, anti-immigration) gains across Europe, culminating with […]
Yet Another Trillion-Dollar Unfunded Liability: Too Many People In Hurricane Alley
One of the big recent changes in American life is the ongoing mass-migration from the middle of the country to the coasts, especially those of the Southeastern and Gulf States. Florida and the Carolinas, along with Houston and surrounding Texas counties, have gained millions of new residents seeking to trade snow and monotony for sun […]
The Paper Gold Market Is Screaming “Short Squeeze”
Every once in a while the trading action in a given market breaks through its historically normal boundaries and starts exploring new territory. This can mean one of two things: Either something fundamental has changed, creating a “new normal” to which participants will have to adapt. Or the extreme move is a temporary aberration that […]
From Buenos Aires To Nashville: The Emerging Market Crisis Spreads From Periphery To Core
This is the last emerging market crisis story for a while, promise. But one angle – exactly how a plunging currency in a far-off place affects supposedly stable markets like the US – is worth exploring because it’s happening right this minute. Let’s start with the choices facing an American or European investor who needs […]
Even Mortgage Lenders Are Repeating Their 2006 Mistakes
You’d think the previous decade’s housing bust would still be fresh in the minds of mortgage lenders, if no one else. But apparently not. One of the drivers of that bubble was the emergence of private label mortgage “originators” who, as the name implies, simply created mortgages and then sold them off to securitizers, who […]
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