madhedgefundtrader's blog

Investors will win the ETF price war, while the real victim will be an arthritic mutual fund industry. You can’t miss those glitzy, overproduced, big budget ads on TV for a multitude of mutual fund families. But they are about to be consigned to the dustbin of history.

Was the financial crisis the result of targeted attacks by terrorists groups? Was it China? Jihadists? Or the Duchy7 of Grand Fenwick? A a John le Carre novel would make better reader.

Food prices will skyrocket, and billions could die. Global warming is leading to significant changes in world weather patterns that will cause droughts in some of the largest food producing areas, causing massive famines. Pack your portfolios with agricultural plays like Potash (POT), Mosaic (MOS), and Agrium (AGU). An exclusive interview with Dr. Paul Ehrlich of “The “Population Bomb.”

How about an S&P 500 down to 666? The Saudi regime falls, and 12 million barrels a day disappears from the market for the indefinite future. Unemployment hits 15%. Obama is toast. Your broker turns bearish and tells you to sell everything. Welcome to the Great Depression II. It starts raining frogs.

Entering 2011 as the currency that everyone loved to hate, the Euro has staged a dramatic comeback, much to the chagrin of hedge fund managers and traders alike. Since January, the troubled currency has rallied ten cents from $1.28 to $1.38. Is this the beginning of something big? Or has it shot its wad and headed for a spill?

It has been a long wait for “peak oilers”. Egypt was a snore, but Libya is a different kettle of fish. Global production peaks in 2015, and after that the sushi hits the fan. Next stop, $300 a barrel?

Is the stock market rally coming to an end, or is there more to go? Should we be buying dips or selling rallies in gold and precious metals? Is the commodities boom a yearlong or decade long phenomenon? Which sectors on the international landscape will be the winners or losers? Are the agricultural plays getting tired, or is it time for a second helping? Will the collapse of the bond market or a spike in oil prices bring the party to an end? Get the answers by attending this free webinar.

What this record global population means for the civilization. Food prices to soar, regional conflicts increase, and countries fight it out for natural resources. Expect a permanent rise in volatility. Will the “one child” policy work in time? Next stop, 9 billion?

The garlic eaters don’t want to repay their debts, and the beer drinkers don’t want to lend them any more money. That pretty much sums up the financial tensions that exist within Europe right now. Time to Short the Euro.

Claims that total defaults in the municipal bond market could reach $100 billion are vastly exaggerated. Teachers will starve, police and firemen will go on strike, and there will be rioting in the streets before a single interest payment is missed to bond holders. Defaults will rise, but it will be from two to only 20, not the hundreds that Whitney is forecasting. Have I seen This movie before?

The basic problem is that nobody cares. Cotton, the grains, and oil all go up for the short term. But the long term impact of the Egyptian blow up on the global economy is minimal. But expect volatility to start trending upward from here. There are black swans out there gathering.

Could this be the third consecutive “sell in May and go away” year? While traders pile on their longs with reckless abandon, and retail flows into equity mutual funds turn positive for the first time in two years, I am hearing a rising tide of negativity from the jungle telegraph. There are “black swans” circling out there everywhere, and the risk is that they alight upon us in great unexpected flocks, like a scene out of Alfred Hitchcock’s classic film, The Birds.

Come meet the Mad Hedge Fund Trader in person over lunch in Orlando, Florida on February 11. This is your chance to debate with me the future of the global financial markets. Please leave the rotten tomatoes at home.

Expect dire reactions by financial markets when the US debt/GDP ratio soon tops 100%. With the current spending trajectory and the new tax compromise, total debt will reach $23 trillion by 2020, or some 160% of today’s GDP, 1.6 times the WWII peak. China and Japan might even demand a retreat from our $150 billion a year commitments in Iraq and Afghanistan to protect their bond holdings. Who were the real big spenders?

The heavy price of a “head and shoulders top”. Competition from rising interest rates in emerging markets and record scrapage rates are eating into the prospects for the barbarous relic. So are higher margin rates for traders. Moving out of hard assets into paper ones. Exiting from a one sided trade. (DGZ), (GLL). (GLD).