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The dashing of youthful expectations of open-ended wealth and security for everyone with a college degree is highly combustible when combined with a popping rea...

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  • China: How The Boom Unravels, One Person At A Time
    By on September 16, 2014 | No Comments  Comments
    The dashing of youthful expectations of open-ended wealth and security for everyone with a college degree is highly combustible when combined with a popping real estate bubble and systemic corruption. Those enamored of China’s ability to build empty apartments, empty malls and empty train stat...
  • The 7 Deadly Sins Of Investing
    By on September 16, 2014 | No Comments  Comments
    I have often written about the emotional and psychological factors that inhibit long-term investment performance (most recently here). Despite repeated studies that suggest investors should just buy “passive index” funds and “hold on” until eternity, the reality is that it si...
  • Was The Market’s Down Week Of Any Importance?
    By on September 16, 2014 | No Comments  Comments
    The market’s winning streak paused this week. It confirmed the short-term sell signal triggered by our technical indicators. But is it of any importance beyond the short-term? It probably depends on where we are in the investor sentiment market cycle, and when we get the next short-term buy sign...
  • Market Cap to GDP: The Buffett Valuation Indicator
    By on September 15, 2014 | No Comments  Comments
    In response to several requests, I’ve updated this valuation indicator to include Second Estimate of Q2 GDP.   Market Cap to GDP is a long-term valuation indicator that has become popular in recent years, thanks to Warren Buffett. Back in 2001 he remarked in a Fortune Magazine interview tha...
  • Investors and Advisors Are So Very Confident and Bull...
    By on September 15, 2014 | No Comments  Comments
    As I noted in Saturday’s blog, Barron’s reported that not even one of the market strategists it surveys each September expects the market to go down. 100% are bullish. The Investors Intelligence Sentiment survey of investment letters, shows the smallest number of bears in 27 years. That’s low...
  • Real Interest Rates and Future Chaos
    By on September 15, 2014 | No Comments  Comments
    The folks at Gresham’s Law just published a nifty interactive chart of real (i.e., inflation-adjusted) interest rates since the 1960s that explains a lot about today’s world. To make sense of this, let’s start with a a little background: Interest rates are the rental cost of money, but to f...
  • Heavy PM Shorting Bullish
    By on September 13, 2014 | No Comments  Comments
    Gold and silver have been pounded lower over the past month, contrary to their bullish seasonals.  This selling pressure has come from the usual suspects, American futures speculators.  They’ve been busy aggressively dumping gold and silver futures, particularly on the short side.  But each tim...
  • ECRI Recession Watch: Weekly Update
    By on September 12, 2014 | No Comments  Comments
    The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 134.9, little changed from the previous week’s 134.8. The WLI annualized growth indicator (WLIg) dropped to 1.8 from the previous week’s 2.3. ECRI has been at the center of a prolonged controversy since ...
  • QE3’s Ominous End Looms
    By on September 12, 2014 | No Comments  Comments
    The Federal Reserve’s third quantitative-easing campaign is on track to wind down in late October.  At that point the Fed will likely stop printing new money to buy bonds, a sea-change shift with ominous implications for the stock markets.  Their entire surreal levitation during QE3 mirrored the...
  • Why a Market Correction Now Would be the Best Scenari...
    By on September 11, 2014 | No Comments  Comments
    Current market projections are diverse. Nobel Laureate in economics Jeremy Siegel says he is still not concerned with valuations and has upped his previous projection of 18,000 for the Dow by year-end to “possibly 19,000″. However, Nobel Laureate in economics Robert Shiller is very worri...
  • China’s Market Rally Continues To Impress
    By on September 11, 2014 | No Comments  Comments
    China’s breakout from a symmetrical triangle formation has been yet another example of how the direction of the breakout from such a pattern usually determines the next direction. China’s Shanghai Index broke out of the pattern to the upside in late July, and has gained 10.2% in the two months ...
  • Countdown To Another Market Peak Has Begun: New Updat...
    By on September 11, 2014 | No Comments  Comments
    Back in June I made the case to be wary of a pullback in the markets this fall (click for article link) based on the increase in inflationary pressures that occurred starting near the beginning of the year. The importance of inflationary trends was laid out in that article with an excerpt provided ...

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