Conspiratorial precious metal bloggers were taken on by Kid Dynamite. Meanwhile, while those guys argue how many angels can dance on the head of a pin, Fed’s Evans Urges Near-Zero Rates Until 6.5% Jobless as Continue reading
Since inception, Independent Stock Analysis has closely monitored the precious metal markets. The bottoming out of the sector and recent breakout calls have been noted. Until China re-accelerates, which is not expected soon, consider the idea gold and especially silver will lead the commodity complex. Feel like you missed the move? It’s very early following a long consolidation according Continue reading
Fed head wants to print in an “open ended program”. Got gold? Ritholtz
“The last time this kind of sentiment was seen after the stock panic, gold was just launching its biggest upleg of this entire secular bull!” Zeal “There currently is a large short position in the Comex gold market, which could set the stage for a short-covering rally in gold prices.” WSJ
“Business Insider offers a deep dive into the world of gold, looking at what moves its price, who is invested in the commodity, and how it’s made.” Scribd
It’ll get papered over: “Growing Fear That Cities Will Default–Not Out of Necessity but as a Strategy”. WSJ With “Key price indexes are uniformly running below the Federal Reserve’s 2% objective” the door is open (WSJ). Housing is adding to GDP (WSJ).
Agnico-Eagle (AEM) stock has returned from the dead, in a really bad tape for gold miners, as operations have been turned around (Mining Weekly). I wrote about it at SA. Meanwhile, Barrick (ABX), Newmont (NEM) and Goldcorp (GG) reported lousy quarters. Gold Bugs Index (HUI): Buy, Hold or Sell? Safe Haven.
Deflation Now. Inflation Later by Bill Bonner.
“The number of Chinese online was already huge, and it’s soared over the past year by more than 50 million thanks to an upsurge in mobile Internet access.” CNET “…800 million to 1 billion new consumers around the world will enter the middle class this decade…” Peter Pham.
“Cash Flow per shares over the past 5 and 10 years has grown at the rate of 5.5% per year and 24.2% per year, respectively. Book Value per share is up nicely over the past 5 and 10 years with growth at 15% and 16% per year, respectively.” SP Brunner
Increasing the inflation target could lead to a super-boom in hard assets while bonds would get crushed. WSJ
The credit bubble may have begun a blow-off top. Leadership has narrowed to US Treasury’s and German Bunds, and investment grade corporates (Bespoke). The Swiss 5-year has gone negative (Sober Look). Meanwhile, spreads are rising (Bespoke). Note “bond prices in free fall” at Reuters.
The financial crisis was entered with government and corporate balance sheets in good shape, while the consumer was a wreck. The next crisis will occur with business and the improved consumer (Housing Views) much better off than governments.
Both energy and industrialization of China related: China to Cut Retail Fuel Prices at WSJ. “Car makers are falling over themselves to get a slice of the action in China, the world’s biggest market.” Telegraph
The structural economic problems are huge, real and weigh heavily on sentiment (Hussman Funds). But a thought process going around suggests auto’s and housing, yes those red-headed step children, might contribute meaningfully in a positive fashion going forward: Econbrowser. Before laughing, continue reading.
Indeed, auto sales are on track to be the best since 2007: “Strong June sales…prompting analysts to revise their consensus forecast of 13.9 million upward, to 14.2 million.” Detroit News
Additionally, for ten consecutive months the construction sector has shown year-over-year job growth: WSJ. I believe residential rents have begun a secular climb with stellar fundamentals. Supply is so tight for decent rental housing that it is almost impossible to find, demand is pent up, and market psychology has shifted: WSJ. Even homeowner equity has improved after collapsing: Mortgage News.
Meanwhile, seems everyone wants easy money. Fed’s Evans Supports More Aggressive Action to Aid Weak Economy at WSJ. China’s Wen says policy fine-tuning needed to spur growth at Reuters. Remember, ever more stimulus is required to keep the party going: Ritholtz.
“He is probably the most successful long-term performer in the hedge-fund industry who has managed to stay out of the spotlight.” A nice little write-up on Seth Klarman: Economist.
“Given that China’s nominal GDP has soared at double digit rates for decades, why is anyone surprised Chinese house prices have risen rapidly?” Money Illusion. India’s is having a tough year, but expectations going forward are strong: India Times.