Market tops occur when investor psychology changes. But it’s not a clean shift. Investors, like any category of people, are comprised of numerous groups or sub-sects: some get it sooner than others.
At these levels of bullish sentiment, fewer bulls isn't a contrarian signal but a sign that there are fewer investors willing to push the market higher.
We have long held that Africa is a crucial region of the world in the near future because there is no more incremental debt capacity at any level: sovereign, household, financial or corporate - in any other region. As tensions between China and Japan multiply, there is an increasing battle for influence in other states. While China and Japan may look like they’re competing in Africa, the two countries are actually playing different games. Whereas Abe seems content to have Japanese businesses make profits, China is actively pursuing soft power on the continent.
Increasing demand for U.S silver coins is set to send silver premiums higher. The premium charged by wholesale dealers for American Eagle coins from the U.S Mint may rise from 14%. The mint has said that weekly allocations will be reduced despite very strong demand so far this month and record sales in 2013.
Folks, I wish I had the answers for you this week.
Despite telling us just yesterday that it would not take sides in the tensions in South Sudan...
*U.S. NOT TAKING SIDES IN S SUDAN: PSAKI
the US government is on the verge of deciding to... take sides. As Reuters reports, the United States is weighing targeted sanctions against South Sudan due to its leaders' failure to take steps to end a crisis that has brought the world's youngest nation to the brink of civil war. Africa, as we have discussed at length, remains the only region on earth with incremental debt capacity (and therefore growth in a Keynesian world) and so it is no surprise the US wants to get involved in yet another conflict.
That's the conundrum investors must face if they want in to this market now.
Forget the last two day's decline. The consensus opinion for 2014 is pretty uniform: stocks will go up modestly, bond will decline in similar fashion. Job growth will grind higher, as will inflation. The Fed will taper its bond-buying program, slowly. And so it may all come to pass... But ConvergEx's Nick Colas ponders what could go wrong, or at least different. Top of his list: fixed income volatility, in conjunction with stock market valuations that are, at best, average. Colas reflects ominously on 1914, where if you read the papers of the day you would have seen much of the same "Yeah, we got this" tone that prevails today. As the great market sage Yogi Berra once opined, “It’s tough to make predictions, especially about the future.” Either way, a cautious outlook is the better part of valor so early in the year.
Nothing can be a more pungent metaphor for today's investment climate than the headline, “Macau gambling revenue hits record $45 bn in 2013.”
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Momentum stocks are the absolute best stocks to invest in from a risk and return standpoint, and there are 5 drivers for GM being a momentum stock 2014.
We are beginning to see signs of a market top.
Outflows of gold from ETF's amounted to 24.3 million ounces, nearly 700 metric tonnes, in 2013. Imports from Hong Kong to China totaled 26.6 million ounces or 754 metric tonnes through September alone. It is unknown where gold would come from to replenish these ETF holdings, if there was a sudden surge in demand in the West in the event of a new sovereign debt crisis or a Lehman Brothers style contagion event.
Due to western central bank price manipulation, the mining sector is in critical condition, the supply line is all but halted, and the physical supply is being swallowed up by Asia. The last shoe to drop is for major mining companies to start closing down production at major mines. Though this would be perceived as the end for gold, speculators will be happy to know that this would be the beginning of the biggest Fed induced bubble in history! But unlike previous Fed bubbles where they support the price increase, the gold bubble will be a result of western central planners mis-managing the gold price for the past 3 decades and finally losing control. As Peak Resources explains in the brief clip, the perfect storm is coming for gold...