Trying to figure out how long the U.S. has to get its financial house in order? History says longer than you think but not forever
The world has a fair deal of experience in dealing with small countries that can’t pay their bills. And the world is gaining more experience by the minute. Greece can’t pay its bills? Put together a funding package that comes at the price of domestic austerity and...Another Japanese trading company is considering an investment in another rare earth company–this time it's Molycorp
Good news—but it’s hard to tell how much that news is worth because so much is still at the “letter of intent” or “considering” stage. Molycorp (MCP), the U.S. rare earth mining play that went public on July 29 with a first day closing price of $12.85, spelled out its...Shanghai stock market falls on speculation that another interest rate increase is on the way–soon
On the Shanghai stock market it’s time to play “Can you guess what the government will do next?” As fans of this ever popular game know, the point is to guess what market roiling move Beijing plans next and then by buying or selling to get your portfolio positioned to...Wall Street economists score the tax deal: $1 trillion in cost to get 0.5% increase in GDP growth in 2011
Yesterday the stock and bond markets weighed in on the proposed deal between the Obama administration and Congressional Republicans to extend the Bush administration tax cuts. Nothing unexpected there: bonds went down on the certainty that the proposal would add to...Why 2010 was so volatile–and why 2011 will be just as wild a ride
Take the long view and look at 2010 as a whole now that we’re near the year’s end, and it looks just slightly better than average for the stock market. In 2010, in fact, investors earned a return that clearly but not hugely above the stock market average...With inflation on a run, the Chinese are buying gold too
China has treated data on the country’s level of gold imports as a state secret—until last week. And the newly public data shows that China is on a path that would have the country overtake India as the world’s largest consumer of gold. Think this might be bullish for...Add this one to the watch list: Wait for the dip before buying rare-earth miner Lynas
Sojitz, the top Japanese trader in rare earth minerals, has just signed a deal with Australia’s Lynas to jointly market 3,000 tons of rare earth minerals from Lynas’s new Mount Weld mine with shipments beginning in late 2011. Volume would quickly rise to 8,000 to...Bad news on jobs and from the Fed is not so much worse than the stock market was expecting
The government employment numbers were a slap in the face on Friday. But the market seemed unrattled. After way better than expected retail sales and pending home sales numbers, and an optimistic employment survey from ADP, the Bureau of Labor Statistics announced on...In Brazil's inflation fight January actions will speak louder than December words
Brazil’s President-elect Dilma Rousseff would like to convince the financial markets that she’ll keep her promise, made in her October 31 victory speech, to cut taxes, reduce government spending, and control inflation. Her two top financial appointments so far send a...So we've got that emerging market dip–now what do we do with it?
Be careful what you wish for. A lot of investors have watched this year as emerging stock markets have left their portfolios in the dust. From May 20 through November 5, the Brazilian stock market (measured by the gains on the iShares MSCI Brazil ETF (EWZ)) was up...Has Santa Claus settled in on Wall Street? Certainly today optimism from Goldman Sachs outweighed the euro crisis
For the day Goldman Sachs and strong U.S. retail sales and housing numbers trumped disappointment over a tepid response to the euro debt crisis from the European Central Bank. This morning Goldman Sachs raised its rating on U.S. financial stocks to overweight and...News on faster growth for China isn't good news in the long run
Right now faster than expected growth in China isn’t a good thing. Not in the long run anyhow. Investors in China get it even if the rest of the world’s markets still stand ready to cheer as they did yesterday. That’s because every bit of extra growth raises fears...Is the glitter back for gold?
Important shift in the market yesterday. Maybe. And it looks like the market is following through today. A stronger “Maybe.” Yesterday, as on most days recently, the dollar was up and the euro down on fears that the euro debt crisis is escalating. That’s...Relief rally takes hold ahead of the European Central Bank meeting tomorrow–Will the bank rain cash on the markets?
A very impressive relief rally is in progress today. It’s built on real good news on the U.S. economy, higher than expected growth in manufacturing in China (which is good short-term and bad long-term), strong statements from the European Central Bank—and relief that...Well that sure worked–the euro debt crisis moves to Spain and intensifies
The financial markets have started to do the math they should have done six months ago, and they don’t like what they’re seeing: The European Union’s much vaunted financial backstop fund might not have enough money to rescue Spain, the numbers argue. That’s because...Inflation hits Brazil hard, raising odds that interest rates will be headed to 12% in 2011
Just what investors need. Another economy and financial market to worry about. Now it’s Brazil. Although compared to the European debt crisis, this worry should be filed under “fret” rather than “panic.” Consumer inflation in Brazil jumped at an annual rate of 5.2% in...The U.S. is the champion stock market in the world–at the moment–although its reign is likely to be rather short
When you’re being chased by a bear, you don’t have to run faster than the bear; you just have to run faster than the other guy. Good advice when you’re camping in bear country. Good advice, too, when you’re thinking about how to allocate your money in the current very...Shoppers open up their wallets on the first shopping weekend of the holiday retail season
Too early to call it a trend, but the retail shopping numbers over the Thanksgiving weekend that traditionally kicks off the holiday shopping season were encouraging to those of us projecting a decent 2% or so increase in retail sales this year. The average U.S....Dollar rallies while the euro stumbles: Which is good for some stocks
The U.S. dollar keeps running higher as the euro stumbles. With financial markets unconvinced that the Irish bailout will put an end to a euro debt crisis that’s ready to engulf Portugal and Spain, the U.S. Dollar Index (DXY) pushed above 81 this morning for the first...Third quarter U.S. GDP growth got revised up to 2.5%–and consumer spending is growing even faster
Just in case you missed it last week while you were out buying a turkey, the U.S. economy is growing faster than previously estimated. Third quarter GDP growth was actually 2.5%, according to the second estimate of U.S. GDP announced on November 23. The initial read...Will the euro band-aids stick this time?
Another weekend, more band-aids. Will the latest round succeed in convincing financial markets that the bleeding in the euro has stopped when earlier applications have failed? The results this morning are mixed. The extent of this round is impressive. First, of...The best of Thanksgivings to you all
I’m taking this site dark so that I can spend the long Thanksgiving weekend with my family and good friends doing all the things that Americans do on this holiday—eating turkey, watching football, trying to snatch a bargain on Black Friday, and, oh yes, giving thanks....Can Beijing fix its run-way bank lending problem? Does it really want to?
Important math yesterday, November 22, by the Financial Times’s James Kynge, the paper’s long-time China correspondent and author of the book China Shakes the World. Kynge notes that the official new bank loan total so far for 2010—a daunting 6.9 trillion renminbi in...Volatility ahead in 2011–and how to live with it (and maybe even profit)
Last Friday, November 19, I sketched out a picture of a very volatile 2011 (https://jubakpicks.com/2010/11/19/5882/ ) and said that today I’d take my best shot at a strategy for how to invest through that turbulence. I probably shouldn’t be telling you this, but most...So what happened to the euro relief rally?
Ireland formally appealed for a rescue by the European Union and the International Monetary Fund on Sunday November 21. The European Union and IMF quickly agreed to the request. Irish Prime Minister Brian Cowen said he expects talks on the package to be completed in...And thoughts of bank dividends danced in their heads
One more test, and, if you pass, you can start paying dividends. That’s what the Federal Reserve told the 19 big banks that were the subject of the original stress test during the financial crisis. Financial statements and capital plans for the new test are due by...Where's the hot money going? China–no surprise–and its service sector–surprise
Want to know where all those hot dollars are headed? Looks like a lot of it is winding up in China’s real estate market. No surprise and nothing different there. Foreign direct investment in China’s real estate sector climbed by 48% in the first 10 months of 2010 from...China raises bank reserves again–another increase in benchmark interest rates can't be far behind
If at fourth, you don’t succeed in slowing inflation, bank lending, and growth in the money supply, try a fifth increase in bank reserve requirements. Today, November 19, the People’s Bank of China announced that banks would have to increase the money they keep as...Prices for 7- to 10-year Treasuries fall–if that's a trend expect money to start flowing back into stocks from bonds
For most of 2010 Treasury bonds have been a very good investment. Sure, they haven’t paid much in interest but with yields falling, Treasury bond prices have been climbing. And so the gain on the iShares Barclay 7-10 Year Treasury ETF, which tracks the price of seven...Jim’s Daily Email Alerts:
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