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Daily Digest 9/8 - More Money Printing Coming, U.S. Gas Prices Could Stay Low For Now

Tuesday, September 8, 2015, 9:29 AM

Economy

Hussman Funds: That Was Not a Crash (Aaron M.)

Those who assert that high equity valuations are “justified” by low interest rates are actually (and probably unknowingly) saying that 0.5% expected returns on equities over the coming decade are a-okay with them. But it’s critically important to understand that while low interest may help to explain why current market valuations have been driven to obscene levels, low rates do not change the relationship – the correspondence – between elevated valuation levels and dismal subsequent long-term market returns.

America is Burning, More Money Printing Coming: Rob Kirby (pinecarr)

Kirby procures tonnage in gold for some of his clients around the world. He sees a global market where physical gold is harder to get and contends, “On the wholesale level in North America, there is metal available. On the retail level, there is very little metal available. In the Asian countries on the wholesale level, there is basically none to be had, and on the retail level it has been bought up too.

How Wall Street Parasites Have Devoured Their Hosts, Your Retirement Plan and the U.S. Economy (richcabot)

In his new book, “Killing the Host,” Hudson hones an exquisitely gripping journey from Wall Street’s original role as capital allocator to its present-day parasitism that has replaced U.S. capitalism as an entrenched, politically-enforced economic model across America.

Trump Manufactures His Clothing Line in China and Mexico While Bashing Them for "Stealing" U.S. Jobs (richcabot)

After talking about the 2012 US presidential race on his show (as seen in a 2012 YouTube clip below), Letterman brought up Trump's "exclusive" signature line of clothing. Trump was ready for the chance to market his eponymous men's fashion apparel. "It's ties, shirts and cufflinks, sold at Macy's, and they're doing great," Trump shilled on Letterman's program. "[It's the] number-one tie sold anywhere in the world."

When “Virtuous Debt” Turns Ferociously Vicious: The Mother Of All Corporate Margin Calls On Deck (Aaron M.)

Credit market instruments, id est. debt, have also risen at a tremendous rate. Net debt, that is credit market liabilities less cash, has actually never been higher. As the chart below shows, sitting at more than US$6.6 trillion, non-financial net debt outstrips even the high from 2008.

Report: Chinese Develop Special "Kill Weapon" To Destroy U.S. Aircraft Carriers (Adam L.)

"The Navy's reaction is telling, because it essentially equals a radical change in direction based on information that has created a panic inside the bubble. For a major military service to panic due to a new weapon system, clearly a mission kill weapon system, either suggests the threat is legitimate or the leadership of the Navy is legitimately unqualified. There really aren't many gray spaces in evaluating the reaction by the Navy…the data tends to support the legitimacy of the threat."

Scientists may have just stumbled upon a mathematical secret to how nature works (Chris M.)

"When you double your prey, you also increase your predators, but not to the same extent,” says Ian Hatton, a biologist and the study’s lead author. “Instead they grow at a much diminished rate in comparison to prey.” This was true for large carnivores on the African savanna all the way down to the tiniest microbe-munching fish in the ocean.

U.S. Gasoline Prices Could Stay Low For The Time Being (Tom K.)

But the demand side of the equation is also pointing to signs of adjustment. Lower prices have spurred much stronger demand for refined products. Car sales for the month of August hit their highest levels on an annualized basis since 2005. And consumers are preferring heavier-duty vehicles, which burn more fuel. Truck sales are up 8.6 percent from the same month a year ago. In June, U.S. motorists drove the most miles ever recorded in a single month, and gasoline consumption spiked by 4 percent from June 2014.

Gold & Silver

Click to read the PM Daily Market Commentary: 9/4/15

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

4 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
China's Shandong to Buy Unsold Homes Amid Property Downturn

Fitch Says Risk of Downgrades Spreading Among Developing Nations

Bloomberg-1 hour ago
Brazil and South Africa top a list of emerging-market borrowers whose credit ratings are threatened by slowing growth and ballooning budget deficits, according ...

China's Shandong to Buy Unsold Homes Amid Property Downturn

Bloomberg-5 hours ago
China's government this year has bought up stocks to stem an equities rout, ... government is stepping in to the property market to snap up unsold homes.

China's Stocks Rebound in Last Hour of Trading as Banks Advance

Bloomberg-12 hours ago
Chinese stocks rallied for the first time in five days on speculation state-backed funds bought shares after data showed signs of a weakening economy.

China's Forex Reserves Fall by Record $93.9 Billion as PBOC Intervenes -- 2nd ...

Nasdaq - ‎Sep 7, 2015‎
The implications for the rest of the world of a shrinking Chinese reserve pile could be profound. China's selling of U.S. Treasury debt as it has bought yuan has led to concerns that bond yields in the U.S. and Americans' borrowing costs in general ...
 

Markets rally on stimulus hopes after Chinese imports slump - live ...

The Guardian-6 hours ago
More likely, China will be more incremental in weakening the exchange rate with .... Iraq is getting ready to issue sovereign debt for the first time in nine years.

Moody's lowers Asia growth forecasts on slowing exports, subdued demand

Economic Times - ‎11 hours ago‎
Moody's has revised its growth forecast for the APAC region, saying weak demand from China has dampened the overall export outlook for the region, while softer commodity prices continued to weigh on some sovereigns' export revenues, external positions ...

Greek Island on 'Verge of Exploding' Amid Migrant Influx, Minister ...

Nasdaq-15 hours ago
Greece's debt crisis have severely limited the country's ability to handle the large number of migrants entering its borders. Last week, Greece's interim ...

UPDATE 1-Thailand approves $5.7 bln measures to aid small firms ...

Reuters UK-6 hours ago
Small firms are suffering from a credit crunch, falling sales and weak consumption amid high household debt while banks grow more cautious about lending for ...

 

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
Americans will fall short in retirement according to study

Americans will fall short in retirement according to study

NJ TODAY-11 hours ago
WASHINGTON, D.C.  – A new analysis indicates that Americans in nearly every state will fall far short in meeting their economic needs in retirement. The State Financial Security Scorecards research project gauges the retirement readiness of future retirees in each of the fifty states and the District of Columbia in three key areas: anticipated retirement income; major retirement costs like housing and healthcare; and labor market conditions for older workers.

Global Economic Growth 2015: US, UK, China Slowdown Expected, Organization for ...

International Business Times - ‎5 hours ago‎
Economic growth was expected to slow in the U.S. and the U.K. while China and Russia were expected to experience continued slowing growth, according to new figures released Tuesday by the Organization for Economic Cooperation and Development, ...

Japan's Nikkei sees year-to-date gains wiped out

BBC News-11 hours ago
Investors also reacted to Japan's revised growth numbers released earlier which analysts said had not eased concerns about the state of the nation's economy.

Japan reports negative economic growth

Hong Kong Standard-16 hours ago
The revised growth figure today was better than some economists had anticipated. A preliminary estimate last month showed the economy contracting at a ...

UBS cuts India's growth forecast to 7.1% for FY16

Financial Express-6 hours ago
Swiss brokerage UBS has revised downwards India's GDP growth projection for the current fiscal to 7.1 per cent, from 7.5 per cent earlier, on account of weaker ...

Moody's trims S. Korea's 2015 growth estimate

The Korea Herald-12 hours ago
Global rating agency Moody's Investors Service on Tuesday sharply lowered its growth outlook on the South Korean economy for this year, citing the fallout from ...

Brazil's GDP Growth Rate May Contract by 2.44 Percent in 2015

The Rio Times-6 hours ago
SÃO PAULO, BRAZIL – Estimates by financial analysts for Brazil's Gross Domestic Product (GDP) growth rate in 2015 have deteriorated further, from a ...

 

Mots's picture
Mots
Status: Silver Member (Offline)
Joined: Jun 18 2012
Posts: 187
Scientists may have just stumbled upon a mathematical secret to

Thank you very much for bringing this to our attention.  (extensive comment withdrawn: I dont have time for texting arguments)

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 653
Looking for a BALANCED Portfolio Manager?

Reading the article below in the NYTimes today, I thought it might be worthwhile to pass it on.  Since I  have "LOST" the gains on the "market" over the last many years (holding cash and PMs), and that the Fed most likely will NOT raise rates (as recommended by both the IMF and the World Bank), I wonder if I shouldn't try to capture some gains from hereon out, as the "market" frequently seems headed to the upside when the Feb does nothing or passes out more QE.  Yet, how to minimize risk?  Could this be an answer?

See mid-comments below: sure sounds reasonable, no?

What remains unclear, however, is how an investing community that has become accustomed to churning out safe and steady returns in a low interest rate, low volatility environment adapts to the new reality of wild market swings.Such sharp ups and downs in the market are expected to become more frequent as the time approaches for the Federal Reserve to push interest rates higher.People might as well get used to them, says Nicolas Just, a portfolio manager at Natixis Asset Management, a French fund company that oversees $904 billion in assets.“These types of sudden market swings will become more and more frequent,” he said. “So you have to be prepared for them at any time.”To survive such bouts of volatility, Mr. Just and his team of number-crunchers do not waste time trying to predict the growth rate of the Chinese economy or whether the Fed will go forward with its stated plan to raise rates sometime in the near future.Instead, they use a computer model that selects stocks from all over the world that do not shoot sharply up and down along with the broader stock market.If you pick a basket of stocks that are not volatile and not correlated with each other, Mr. Just argues,

you can lock in safe and steady gains on the upside and suffer less than the broader market on the downside.

To date, Mr. Just says that his portfolio has suffered less than the broader market. This year, Mr. Just’s global minimum variance fund is up 7.8 percentOn a broader scale though, Mr. Brigden, the investment adviser, thinks that the shakeout of the last month will continue as investors come to realize that the days of low volatility investing are over.“We have had this long backdrop of suppressed volatility with equities doing well and an utter lack of bond risk,” he said. “With central banks no longer buying bonds, that virtuous circle is becoming vicious.”

Do our "Harbor" folks do this too?

Ken

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