The world's expected economic growth will have to be supported by an extra $100 trillion (£63 trillion) in credit over the next decade, according to the World Economic Forum.
When a retiree in Texas discovered that some Chinese companies listed in the U.S. are frauds, he unleashed an army of short-sellers. "China will make Enron look like nothing…" - The Wedge Man
[[wysiwyg_imageupload:1308:]]By John Mauldin
Last week, in the first part of my annual forecast, I suggested that 2011 would be better than Muddle Through, with GDP growth in the US north of 2.5%. World GDP growth should be even better. This week we look at what I see as the real downside risks to that prediction. Oddly enough, the risks are not in the US but on the other side of both our oceans, in Europe and China. Plus, we will visit a few other items, assuming we have space (Bernanke's recent speech just screams for some comments).
Two housekeeping items. First, I will once again be hosting, along with my partners Altegris Investments, our 8th annual Strategic Investment Conference, in La Jolla April 28-30. Save the date. Each year the conference gets better. We have as strong a lineup of speakers as any conference in the country. I will announce when we will take reservations. It always sells out, so I suggest you do not procrastinate.
China’s stocks plunged, driving the benchmark index down the most in two months, as the central bank ordered banks to set aside more reserves and rising property prices signaled policy tightening measures may be expanded.
By Michael Ashton
Retail Sales was softer-than-expected (+0.6%, +0.5% ex-auto, plus downward revisions, versus 0.8%/0.7% expected), Industrial Production stronger-than-expected (+0.8% versus +0.5%), and CPI a smidge above expectations (maintaining 0.8% y/y on core, and rising to 1.5% y/y on headline). More on CPI later.
"Close enough!" cried the equity traders, who subsequently put up prices 0.7% on the day, to 28-month highs in the S&P. Bond traders also felt the balance favored a stronger economy and faster price increases, but moved yields only a few basis points higher with the 10y note to 3.33%. Inflation swaps curiously softened 2-5bps despite the reasonably sunny outlook for carry; some traders and investors feel the inflation market is a bit frothy right now - which it is, but supply is tight and I am not sure I'd be very aggressive about shorting inflation-linked bonds even at these valuations.
What do Jim Rogers, Marc Faber and Richard Russell have in common? All three men possess a gift for analyzing financial markets independently and cautiously, and do so with decades of experience. Each man sells nothing but what’s on his mind—the best kind of advice to cautious investors.
By Elliott Wave International
To understand what's a greater threat to the U.S. economy -- inflation or deflation -- it helps to understand what role the U.S. Federal Reserve plays
Despite so much focus on the policies of the Fed, its operations remain somewhat of a mystery to most investors -- in no smaller measure, due to their complexity.
So, we put together a free resource for our Club EWI members: a 35-page report that explains the Fed, its goals and, very importantly, its limitations in layman's terms.
Enjoy this excerpt -- and for details on how to read the 35-page free report in full now, look below.
With the U.S. unemployment rate at 9.4 percent and only tentative signs that businesses are beefing up hiring, Fed officials, including Chairman Bernanke, see a duty to prevent a further deterioration of economic conditions -- and have signaled a readiness to use all the tools at their disposal.
By Robert Sinn
Tuesday I had the pleasure of meeting Marc Faber for the first time and I thoroughly enjoyed his detailed, logical, and smooth-flowing presentation. Faber is good on television, but he is much better live as he is more open with regard to his disdain for Bernanke, Greenspan, Krugman et al. He even ended the Q&A portion by saying ‘I hope you have a better idea of what to do with your wealth, but what you do with your client’s wealth is another story’. Below I have listed the main concepts that Faber’s presentation impressed on my thinking:
When garment buyers from New York show up next month at China’s annual trade shows to bargain over next autumn’s fashions, many will face sticker shock.