We went to our last summer soiree last night. It took place at a neighbor’s chateau, where a large, ancient stone barn had been transformed into a dining room for 100 people. “We’re screwed…so are you…” said a friend. First, an update from Wall Street: the Dow was unable to sustain a bounce yesterday. It [...]
Anthony Bolton is making a big bet on the Chinese consumer. You may never have heard the name before, but Bolton was one of the UK’s investing wizards. For 28 years, he racked up returns of 19.5% annualized. Since he had a long and superb track record and managed money for Fidelity, people called him [...]
Things didn’t get any better for the currencies yesterday (save yen (JPY) and francs (CHF)), as the focus, whether it belongs there or not, remains fixated on the GIIPS once again, and their ability to function under the weight of debt they’ve created for themselves. For those of you new to class, GIIPS is short [...]
From Germany comes news of a remarkable resurgence. BERLIN – The government on Friday announced quarter-on-quarter economic growth of 2.2 percent, Germany’s best performance since reunification 20 years ago – and equivalent to a nearly 9 percent annual rate if growth were that robust all year. The strong growth figures will also bolster the conviction [...]
Nothing much happened on Wall Street Friday. Gold…stocks…held more or less where they were. So, we take up another week…wondering…waiting…trying to puzzle out what is going on. Just like every other week! Economists are finally beginning to ask questions. How come the economy isn’t doing better? Why aren’t consumers spending? Why aren’t businesses hiring? They [...]
Is high debt a drag on economic growth? Or is a recession born of other catalysts the source for high debt?… Source
U.S. stocks finished lower on Thursday, with disappointing corporate results and a Fed official’s warning on deflation sapping some of the optimism drawn from earnings season and the market’s strong gains in July. Investors were also searching for cues from the government releases of its first take on U.S. second-quarter economic growth on Friday. The [...]
On Friday, everything went down. Well, almost everything. The Dow fell 261 points. Gold dropped $22. Copper. Oil. The dollar. You name it; it went down. Unless you name US Treasury bonds – which were up! What does this mean? Maybe nothing. But since it accords with the direction we think the markets ought to [...]
It is a national holiday in France, today. But your Daily Reckoning team is on the job anyway. We neither sleep nor rest nor take time to honor any of the world’s bogus holidays. We just reckon. Bogus holidays? Well, the storming of the Bastille was hardly cause for celebration. But we’ll come back to [...]
Just after a sweltering Fourth of July weekend, new predictions are calling for a stronger-looking US dollar over the next year… at least in terms of the euro. A number of currency forecasters, recognized by Bloomberg as some of the world’s most accurate, are predicting the euro will continue to weaken and as is destined [...]
We closed the books on the second quarter yesterday. One that probably will end up showing some real rot on the US economy’s vine. Yes, I do believe that rot is going to be exposed as we move along in July. So… We have that going for us! The news from China, overnight, was not [...]
We may not have said it first, but we have said it repeatedly: The U.S. economic recovery is a myth…a fairy tale. The more enthusiastically the Wall Street rah-rahs proclaimed the start of a new growth phase, the more emphatically your editors pooh-poohed the idea. “The non-recovery seems to be gathering momentum,” your California editor [...]
US debt continues surging higher and the chart below shows a likely outcome: debt will exceed GDP in as early as 2012. Yep, that’s fewer than two years from now. From Bloomberg: “…the government’s total debt [...] rose past $13 trillion for the first time this month. The amount owed will surpass GDP in 2012, [...]
We overheard one story while in Beijing, that captures in a nutshell the challenge in getting a handle on investing in China: ”I was in an antique store, negotiating for this antique knife,” our China contact told us. “I was about to make the deal when the guy looked at my Rolex watch and offered [...]
Paul Krugman questions the central finding in a new Reinhart-Rogoff research paper that focuses on the apparent linkage between government debt and economic growth… Source
The Federal Reserve releases transcripts of the Federal Open Market Committee (FOMC) meetings with a five-year lag (as required by law, the Fed would like to burn them). Transcripts for 2004 meetings were released on April 30, 2010. The Dow Jones Industrial Average fell 998 points on May 6, 2010. The 2004 transcripts help explain [...]
Two big numbers made news yesterday as we approached the market close. No one, to our knowledge, made a connection between the two. But to us, the connection is screamingly obvious. And frankly, your financial future hinges on that connection. Here’s the first number: $82.7 billion. That’s the deficit the US Treasury posted last month. [...]
Thoughts on Earth Day from the American Enterprise Institute: Steven Hayward: One… Source
The dollar moved higher throughout the trading day, and the rally continued in overnight trading. Just about all of the major currencies were down, with the Singapore dollar (SGD) and Japanese yen (JPY) the only two that saw a positive return versus the greenback. This would indicate that Wednesday was a ‘risk off’ day, as [...]
Our little bull market is one year old today. Yep, that’s right, just one year ago our little cherub came into the world… And my how it has grown! Since touching a 12-year low on March 9, 2009, the Dow has bounced more than 61%. Over the same timeframe, the S&P 500 has soared 72% [...]
