The charts for almost all ag products, like corn, wheat, and soybeans, are making potential one year double bottoms. Bad weather is now threatening in Canada. The world is both eating more food, and more calorie intensive foods, like beef and pork, thanks to rising emerging market standards of living. A further boost from the Yuan revaluation. The new family of ag ETF’s will be a game changer. (CORN), (CANE), (WEAT), (SOYB).
Many people have asked me how SRS and REITs share prices can defy gravity the way they have given the abysmal state of commercial real estate (CRE). Well my opinion is that the equity and the debt markets have allowed agent and principal manipulation to the extent that it materially distorts and interferes with the market pricing mechanism.
After maintaining a low-risk real estate strategy for decades, studies commissioned by Calpers show that it switched gears in 2002, embracing higher levels of risk even as the real estate market began to top out in 2005. By mid-2009, Calpers had a one-year loss of 48.8% in its real estate portfolio and was reporting among the lowest returns of any large pension fund in the country.
Despite the pleas of Dr. Athreya to the contrary, Rick Davis of the Consumer Metrics Institute boldly goes where no BLS statistician or Fed economist dares...that is into the upstream consumption data (gathered in real time, no less) that leads the taxpayer-subsidized bean counters' work by up to seven months. While it's no surprise that all is not well on the H2 2010 horizon, CMI tells us specifically what to watch out for.
Hedge funds poured into the currency down under, making it one of the world’s best performing assets this month. The bottom line is that interest rates there are high and rising, while ours are low and stagnant. A procession of central banks have been pulling the ripcord on the troubled euro and landing into currencies with vastly better fundamentals. A proposed 40% mining tax triggers a stunning change in government. Singing “Waltzing Matilda” in the shower. (FXA), (EWA).
Paul Krugman, obviously in total distress over the G20 deficit cut pact, sees a 3rd depression coming to America. Meanwhile, Dr. Doom--Nouriel Roubini--sees a slowdown rather than a double-dip recession in the U.S., and Harvard University professor Niall Ferguson agrees.
This is the fourth and final part of my major four part series dealing with what I feel is the primary question investors must now answer: is our future to be inflation or deflation? The answer has vast implications to our investment planning and decisions for the near term, and possibly for our long term. It is a very complex question with a lot of moving parts involving economics and politics. For those of you who have stuck with me for this series, thanks!
Tuesday's relentless sell-off across US equity markets marked an undeniable end to the continuous series of higher lows that had been intact since July 2009; closing below 1,044.50 on the S&P 500 Cash, bulltards can no longer claim that the primary trend of equities remains bullish. With ZMH the only S&P 500 issue closing higher, could GETCO be anticipating a large order from Mr. Market for a new hip? Joking aside, what can we expect after such an all-encompassing technical rout?
“We will have a financial crisis again — it’s just a question of the frequency,” said the economist Kenneth Rogoff, who, with Carmen M. Reinhart, wrote a terrific book titled “This Time Is Different: Eight Centuries of Financial Folly.” The title says it all. We’ve been through this before and will go through it again.