By: Bill Bonner & The Daily Reckoning Crew - 25 August, 2006
-The Behavioral Finance School is rather shabby...as the free money dwindles, real estate sinks - and the marginal buyers sink even lower... -In the land of the free, homeowners are slaves for life...the new poster child for Squanderville... -Checking in on the Trade of the Decade...ponzi finance...and more! Full Story
By: Peter Schiff, Euro Pacific Capital, Inc. - 25 August, 2006
During the unprecedented run up in housing prices over the last decade, most economists and real estate professionals firmly declared that the market would always move higher. When the recent cooling dashed those hopes, many reluctantly fell back to the “soft landing” hypothesis, which predicts that price appreciation will return to historically average rates. However the latest housing data, particularly this week’s figures on new and existing home sales, have made these overly rosy assumptions untenable. Full Story
Although I had grown weary of explaining why deflation is the only possible outcome for our mortally sick economy, a chat group that I monitor drew me into an argument with someone who sees only the possibilty of inflation. The crux of his case is that, even though deflationary catalysts such as an incipient real estate recession are present, “the government has already planted the seeds of continuing inflation in the huge and accumulating budget deficit.” I would assert that deficit spending, no matter how extravagant, will not be nearly strong enough to surmount the fatal drag on household spending about to be triggered by a housing bust. Full Story
By: Puru Saxena & The Daily Reckoning Crew - 24 August, 2006
-The housing market is flooded with inventory, and sellers are getting soaked...money isn't everything, but you shouldn't ignore it... -Americans are going down with the ship, and drowning in debt...a whole nation of bubble-believers... -Overconsumption, overconfidence, statistical manipulation...and more! Full Story
“Housing Prices May Become More Volatile”. Where do they dig these stories up? The headline, lifted from the latest edition of The Wall Street Journal, is a real classic of the genre in the Sugar-Coated News category. We infer from the word “volatile” that in the years to come, home prices can be expected to both rise and fall at least somewhat more capriciously than usual. Ah, would that we could rely on it. Full Story
-Today's topic: Irrationality...The finance behaviorists are drumming their fingers nervously... -When to go into pornography, illegal drugs, and - gasp - even hedge funds...A gluttonous analogy applied to investing... -Dear reader, you might have a thinking problem...Addison's recent conversation with Dr. Richebächer...and more! Full Story
By: Bob Chapman, The International Forecaster - 23 August, 2006
The existing level of debt as well precludes any kind of an easy recovery. These debts cannot be paid and they increase exponentially month by month. This debt structure began on 8/15/71, and is in the process of imploding. It’s only a question of when. The final blow was the active pursuit and implementation of free trade and globalization in the 1980s. The results of those efforts are now manifesting themselves. Now you can fit the pieces together like a mosaic. Full Story
By: Richard Daughty, The MOGAMBO GURU - 23 August, 2006
If you are wondering why I am drooling and babbling incoherently, one reason could be that that I am pretty sloshed by this time. And I am "in my cups" because Total Fed Credit went down by $4 billion last week. Not overly remarkable in itself, but the growth of TFC, from which springs the excessive creation of money and debt that has been killing America for over 40 years, looks like it really HAS stopped accelerating! Wow! But only time will tell. Full Story
-The destruction of the American middle class...Inflation leads to disorder and sorrow... -Where did these fools get their money?...A hedge fund manager is born... -What choices does the indebted American consumer have?...The people have taken over in Europe...and more! Full Story
In the first hour, the Goldwizards return. Jack Chan is bullish on the bond market and continues to think that we've seen the top in energy related investments. Gary Kaltbaum also likes bonds and turns cautiously optimistic on the stock market. Lastly, Bob Chapman and I discuss the markets and this weeks articles of interest.
In the second hour, Peter Schiff from Euro Pacific Capital, tells us why he expects gold to soar to $5,000-$10,000 in the years ahead. He also discusses how various electronic forms of gold may be implemented to help insulate the economy from the declining dollar. Next, Justice Litle joins me to discuss various economic issues. Justice shares Peter's ideas regarding a solution to the falling dollar. Full Story
By: The Mogambo Guru & The Daily Reckoning Crew - 21 August, 2006
-Project Sunrise...turning to the "Dark Continent" not to laugh, but to weep... -Money is cheap - get it while you can...more work to be done on the gypsy wagon... -"Making things" is old economy - new economy is in "services"...Bill is exposed to Jay and Silent Bob, and weeps for the future...and more! Full Story
The U.S. economy continues to edge toward recession, although you'd never know it from the way the stock market has been acting. Shares finished the week moderately higher on Friday, up for a fifth straight day on a flurry of reports that together suggest inflation is rather more tame than some evidently think it should be. Full Story
By: Bob Chapman, The International Forecaster - 20 August, 2006
The market and the currency have all the earmarks of 1987, when on October 19th, the market lost 22.6% in one day and gold surged. We have some similar problems today. A new Chairman of the Fed, a large current account deficit and unsustainable tax cuts and excessive military spending. In 1985, as a result of the Plaza Accord, the dollar was allowed to fall as the dollar has since 2002. Then the trade fight was with Germany and Japan and today it is China and Asia. Thus in 1987 markets were nervous about the economy, inflation, higher interest rates and a new clumsy Fed chairman. The Germans and Japanese were threatened and it was demanded that their currencies appreciate. Germany told the US to take a hike and the Dow crashed. Full Story
By: John Mauldin, Millenium Wave Advisors - 20 August, 2006
The markets have closed up for five straight days. So much for my concern that either the economy might be slowing down or that if the economy does not slow down inflation will be a problem forcing the Fed to take action later this fall. Clearly, the majority of investors think we are in a Goldilocks scenario. In fact, Ed Yardeni uses that term in an interview with Mark Gongloff at the Wall Street Journal Online. Mark then contrasts my views with Ed's in an excellent piece called "Soft Landing: Many See a Goldilocks Market, While Others See Stagflation Light." Full Story
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