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Posts Tagged ‘financial’

Are You Prepared For An Economic Collapse?

August 19th, 2013

economyThe next great economic crisis is rapidly approaching, and most people are going to be totally blindsided by it.  Even though the warning signs are glaringly obvious, most Americans continue to believe that our “leaders” know what they are doing and that everything Read more…

Consumer, Economy, Government

17 Signs That Most Americans Will Be Wiped Out By The Coming Economic Collapse

June 25th, 2013

economyThe vast majority of Americans are going to be absolutely blindsided by what is coming.  They don’t understand how our financial system works, they don’t understand how vulnerable it is, and most of them blindly trust that our leaders know Read more…

Economy, Government, Markets

10 Examples Of How Clueless Our Leaders Are About The Economy

March 13th, 2013

obamaThey didn’t see it coming last time either.  Back in 2007, President Bush, Federal Reserve Chairman Ben Bernanke and just about every prominent voice in the financial world were all predicting that we would experience tremendous economic prosperity well into the future.  In fact, as late as January Read more…

Consumer, Economy, World News

All Of This Whining And Crying About The Sequester Shows Why America Is Doomed

February 28th, 2013

america united statesIf we can’t even cut federal spending by 2.4 percent without much of the country throwing an absolute hissy fit, then what hope does America have?  All of this whining and crying about the sequester is absolutely disgraceful.  The truth is that even if the sequester goes into effect, the U.S. government Read more…

Consumer, Economy, Government

Large Cities All Over America Are Degenerating Into Gang-Infested War Zones

January 7th, 2013

detroit cityMichael Snyder: Large U.S. cities that the rest of the world used to look at in envy are now being transformed into gang-infested hellholes with skyrocketing crime rates.  Cities such as Chicago, Detroit, Camden, Read more…

Economy, Government

55 Facts Every American Voter Should Know About The U.S. Government Finances

October 18th, 2012

The future of the United States of America is being systematically destroyed by our politicians, but unfortunately most Americans don’t really grasp exactly what is happening.  Read more…

Education, Government

Why The Global Economy Is In Trouble

October 15th, 2012

The global debt crisis has reached a dangerous new phase.  Unfortunately, most Americans are not taking notice of it yet because most of the action is taking place overseas, and because U.S. financial markets are riding high.  But just because the global economic crisis is unfolding Read more…

Economy, Europe, Government

Experts Say That A Stock Market Crash Is Coming (JPM, BAC, GS)

October 10th, 2012

In the financial world, the month of October is synonymous with stock market crashes.  So will a massive stock market crash happen this year?  You never know. The truth is that our financial system is even more vulnerable than it was back in 2008, and financial experts such Read more…

Economy, Financials

Federal Government: More Than 100 Million Americans Are On Welfare

August 17th, 2012

Michael Snyder: There are more Americans dependent on the federal government than ever before in U.S. history.  According to the Survey of Income and Program Participation conducted by the U.S. Census, well over 100 million Americans are enrolled in at least one welfare Read more…

Government

Tax Loss Harvesting – using sector ETFs to continue the exposure

November 28th, 2011
Many financial advisors use low-cost, liquid exchange traded funds in tax-loss harvesting strategies that can offset future gains and cut clients’ tax bills in the Read more…

ETF, Uncategorized

The Likelihood of a US Default

June 15th, 2011

After 6 straight weeks of losses, it looks like the US stock market is ready for a winning week. The Dow rose 123 points. Oil stayed below $100. But the yield on the 10-year T-note rose above 300 basis points.

And here’s the latest from The Financial Times:

“S&P cuts Greece’s rating one step closer to default.”

Want to earn a nice yield on your money? Buy a Greek 10-year bond. It will pay you 17% interest. For a while.

But wait. You say you can’t trust the Greeks? You say they’re not good for the money?

“The Greek political landscape is ingrained with vested interests, endemic kleptocracy and bribery,” writes John Sfakianakis, chief economist of Banque Saudi Fransi.

Unemployment is around 20%. People dodge taxes. Government workers don’t show up for work. Households spend too much. And the government is going into debt so deeply and so rapidly it can’t possibly get out.

Hey… It’s just like the US! No, the US is worse, says Bill Gross. CNBC:

When adding in all of the money owed to cover future liabilities in entitlement programs the US is actually in worse financial shape than Greece and other debt-laden European countries, Pimco’s Bill Gross told CNBC Monday. Much of the public focus is on the nation’s public debt, which is $14.3 trillion. But that doesn’t include money guaranteed for Medicare, Medicaid and Social Security, which comes to close to $50 trillion, according to government figures.

The government also is on the hook for other debts such as the programs related to the bailout of the financial system following the crisis of 2008 and 2009, government figures show.

Taken together, Gross puts the total at “nearly $100 trillion,” that while perhaps a bit on the high side, places the country in a highly unenviable fiscal position that he said won’t find a solution overnight.

“To think that we can reduce that within the space of a year or two is not a realistic assumption,” Gross said in a live interview. “That’s much more than Greece, that’s much more than almost any other developed country. We’ve got a problem and we have to get after it quickly.”

How do you like that? He didn’t even mention the fact that Americans can’t sell their houses to Germans or turn their country into a retirement home for sun-deprived Scandinavians.

But wait, if the US debt situation is as bad or worse than Greece’s, how come the yield on US 10-year notes isn’t 17% too?

Therein may lay an even bigger opportunity. What if Mr. Market were making a mistake?

Everybody knows that Greece always defaults on its debt. It’s been in default, one way or another, for about half of its life – ever since it gained independence in 1828.

But the USA? If you can’t trust the US to pay up, who can you trust?

So, investors may feel secure lending money to the US…even though the fundamentals are little different from those of Greece. They may think: “the US never defaults.”

And yet, if there’s one thing we can learn from financial history it is that nobody is immune from financial errors. Everyone gets greedy and stupid from time to time. And no paper currency lives forever.

Right now, you can earn 17% on Greek debt or 3% or US debt. We’ll make a prediction that you can take to the bank: that spread will narrow.

The inflation rate in America is a matter of debate. But even the US government’s own number crunchers put it at about 5% for the first quarter of this year. That makes the real return on US 10-year notes a MINUS 2%.

How long will investors content themselves with a negative return? Maybe for a while. But not forever. They usually want a real return of about 3%, with no threat of default. A safe return, in other words.

And when they realize that the inflation rate in the US is really 5%…and that the return on US debt is NOT safe…they’re going to want a higher interest yield.

Say 5%. Or 7%. Or 10%.

Then, all hell is going to break loose.

Bill Bonner
for The Daily Reckoning

The Likelihood of a US Default originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.

Read more here:
The Likelihood of a US Default




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Uncategorized

Collapse: It’s Coming! Are You Ready? (Part Two of Two)

June 15th, 2011

Continued from Part One.

According to a June 8th CNN/Opinion Research Corporation poll, 48 percent of Americans believe that another Great Depression is likely to occur in the next year – the highest that figure has ever reached. The survey also indicates that just under half of the respondents live in a household where someone has lost a job or is worried that unemployment may hit them in the near future.

Suddenly, after years of obvious economic hardship experienced by tens of millions of Americans – only when the suffering and pain can no longer be cloaked in abstractions and cooked statistics – does an emboldened media dare utter the forbidden “D” word.

For Trends Journal readers, alerted to this emerging trend some three years ago, the prospect of Depression should come as no surprise. Neither should the idea that, when it hits and can no longer be denied, a long suffering public will take to the streets.

When I made this forecast back then it was written off by most of the major broadcast and print media. Now, however, when one of their own, belatedly and hesitantly, raises that possibility he is elevated to sage status and it becomes big news. In early June, Democratic strategist James “It’s the Economy, Stupid” Carville, having finally mastered the higher math of adding two plus two, warned that decaying economic conditions heightened the risk of civil unrest.

As I described it all those years ago: “When people lose everything, and have nothing left to lose, they lose it.”

Trend Forecast: The wars will proliferate and civil unrest will intensify. As we forecast, the youth-inspired revolts that first erupted in North Africa and the Middle East are now breaking out in Europe. Given the trends in play and the people in power, economic collapse at some level is inevitable. Governments and central banks will be unrelenting in their determination to wring every last dollar, pound or euro from the people through taxes while confiscating public assets (a.k.a. privatization) in order to cover bad bets made by banks and financiers.

When the people have been bled dry financially and have nothing left to give, blood will flow on the streets.

Trend Lesson: Learn from history. Do you remember when it first became apparent that the US economy was in deep trouble and heading toward the “Panic of 08”? Not many will. Most people were in a summer state of mind and in holiday mode. It was late July 2007 when the stock market suddenly plunged from its euphoric 14,000 high.

Though we had warned in our Summer 2007 Trends Journal (released that June) that “trends indicators point to a major crisis hitting the financial markets between July and November,” the diving Dow was downplayed as a mere “hiccup” … a time to pause between more mouthfuls of expansion.

Biggest mistake in a falling stock market

The huge swings in the Dow are giving investors pause. But taking your money out of the market now could be the gravest mistake of all.

NEW YORK — This past Thursday was the second worst day of the year for the Dow Jones Industrial Average. But remember, it was just a week ago today that the Dow closed above 14,000 for the first (and only) time.
Fluctuations in the market shouldn’t get to the 401(k) investor. Keep in mind your time horizon – most of us are going to be invested in the market until we retire, often decades from now. CNN 27 July 2007

Four years and trillions of dollars in stock and 401(k) losses later, that typical “take a deep breath, stay the course” advice looks tragically misguided. The Dow would eventually lose more than half its value and now, in June 2011, it’s fallen below 12,000.

The moral of this story is to not let your mind take a summer vacation. Conditions are rapidly deteriorating and it is imperative to remain on high alert. Another violent financial episode is looming. It may be triggered by economics (e.g., debt defaults and debt crisis contagion in Europe, a crashing US dollar, or commodity price spikes); it could be terror (false flag or real), a man-made disaster (another Fukushima) or one made by Mother Nature … or any combination of the above.

Publisher’s Note: To excel in any field – from gourmet chef to concert pianist to close-combat warrior – you have to practice … endlessly, over and over, until finally the training sinks in and becomes a part of you.

In that spirit, I again repeat: preparing for financial survival is a “practice.” And it has to be treated as if you are preparing for battle; expect the unexpected and prepare for the worst, which in these perilous times could be a declaration of economic martial law. Banks may close, currencies may be devalued and deposit withdrawals may be imposed. Remember Gerald Celente’s basic survival strategy, “GC’s Three G’s: Guns, Gold and a Getaway plan.”

Regards,

Gerald Celente
for The Daily Reckoning

P.S. In the Summer 2011 Trends Journal (mid-July release) we will provide practical strategies to cope with the coming collapse and offer approaches that, if implemented, could reverse the prevailing negative trends.

Collapse: It’s Coming! Are You Ready? (Part Two of Two) originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.

Read more here:
Collapse: It’s Coming! Are You Ready? (Part Two of Two)




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Uncategorized

What to Do In Case of Liquidation

June 13th, 2011

The Dow Jones Industrial Average tumbled 172 points last Friday – punctuating another thoroughly forgettable week for American capitalism. Friday’s loss submerged the Dow back below the 12,000 mark, while also producing a sixth straight losing week for the US stock market.

How rare is a six-week losing streak?

During the last twelve years, the US stock market has suffered only five losing streaks of six weeks or more – the last of which occurred in the summer of 2004. In three of those five rare losing streaks, gold and commodities also fell. In the first two such instances – September-October of 2000 and February-March of 2001 – the S&P 500 Index fell 20% or more over the ensuing year…and was still showing losses three years later.

The third of these three instances is underway at the very moment…and that’s probably not good news.

Most of the time, when stocks go zig, gold (and commodities) go zag. That’s called “inverse correlation” or “non-correlation.”…and it is one of the many reasons gold is a nice thing to own. You can usually count on it to shine when almost every other investible asset is losing its luster.

Lately, however, gold is doing very little zagging to the upside, even though stocks are zigging to the downside. In fact, there isn’t a lot of non-correlation going on anywhere in the financial markets. Many assets are correlating with stocks much more than usual. When all asset classes begin falling together, even worse declines are usually on the way. Professional investors call this a “liquidation event.”

The recent min-selloff on Wall Street hardly qualifies as a liquidation event…yet. But one thing is very clear: during the last few weeks it has been much easier to lose money than to make it…no matter what you owned.

During the last six weeks, the S&P 500 has dropped nearly 7%. During that same timeframe, gold is down 2%, oil is down 13% and silver is down 25%. Even Inflation-protected Treasury bonds [TIPs] are down. In short, there have been very few places to hide for the last month and a half.

This simultaneous selloff in stocks and commodities is not comforting. But lest we be accused of “data snooping,” allow us to advance a theory to validate the apparent connection between the six-week losing streaks of the past and the present.

The theory is pretty basic: when everything starts falling at the same time, a liquidation event is underway. Investors simply want out…of everything. In such circumstances, risk avoidance takes the place of risk-taking…and this attitude tends to persist for a while, as the examples of 2000 and 2001 illustrate.

A liquidation event may or may not be underway, but investors do not lack for solid reasons to head to higher ground…or to any ground that doesn’t act like quicksand. Past is not necessarily prologue, dear reader. But when investors become eager sellers of all assets, caution is in order.

It’s time to do one of the following things:

1) Panic and reduce your exposure to equities, just in case.
2) Think long-term and don’t worry about it.
3) Buy the stuff that holds its value long-term, no matter what the short-term noise might be.
4) Both #1 and #3.

Our vote would be #4.

Eric Fry
for The Daily Reckoning

What to Do In Case of Liquidation originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.

Read more here:
What to Do In Case of Liquidation




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Commodities, Uncategorized

Buy Gold…or Farmland

June 13th, 2011

My friend Brad Farquhar is the co-founder of Assiniboia Capital in Saskatchewan, which invests in farmland there, among other things. He sends the following note:

“Farm Credit Canada, the biggest ag lender in Canada, publishes a province-by-province report on movements in farmland prices in Canada every six months.

“Of course, we track this and are interested in what they have to say. No great surprises in their new data, but we also played around with it to see what else might pop out at us.

“Sometimes in my presentations I show a chart that demonstrates the correlation (within a range) of the price of gold, oil and farmland in Saskatchewan. The correlation is pretty good. Farmland tends to lag a bit because it is a less-liquid asset class and not quoted daily. Also, one acre of farmland is not necessarily substitutable for the next acre the way ounces of gold and barrels of oil are.

“But as the next chart shows, the Sask farmland/gold ratio is getting well outside its traditional range.

The Price of Gold as Measured in Acres of Saskatchewan Farmland

“These things tend to correct themselves, and would do so either by the price of gold coming down or the price of farmland going up. Given the various forces at work in the financial world, I don’t see the price of gold coming down. Which leaves farmland to go up (particularly here in Saskatchewan, where it is still undervalued relative to its productivity).

“With gold held at $1,500, the price of Sask farmland would need to move to $865 per acre just to get back within the normal historical range. The current price is $526 per acre, representing upside of 65%. Of course, we expect gold to move higher too, dragging all other real assets along with it.”

Brad’s firm has been in Saskatchewan farmland since 2005. It’s turned out to be a good call. I have written about Saskatchewan farmland many times in the past…and I have been a longtime advocate of buying farmland. That’s why I’m planning to visit Brad in Regina next month and have a look around. I’ll have more to share with you on all of this soon, as well as ways you can participate.

There are many opportunities in Saskatchewan, which is an agricultural powerhouse. Saskatchewan exports a large percentage of the world’s goods:

  • 67% of world’s lentil
  • 56% of world’s peas
  • 25% of world’s mustard
  • 40% of world’s flaxseed
  • 18% of world’s canola
  • 33% of world’s durum
  • 53% of world’s potash

I remain a big believer in agriculture-focused investments as one of the very best “hard asset” allocations for the decade ahead. Ag investments not only provide a hedge against dollar weakness, they also stand to benefit from extremely favorable supply-demand trends worldwide.

The world needs more food. It won’t be easy to supply it. That’s the kind of trend all investors should crave.

While it’s true that you can’t transport an acre of farmland or spend it as easily as a Krugerrand, neither can you grow lentils on a gold bar. If you have a hard time choosing between the two, buy both.

Regards,

Chris Mayer
for The Daily Reckoning

Buy Gold…or Farmland originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.

Read more here:
Buy Gold…or Farmland




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Commodities, Uncategorized

This Trade Could Break out for a 44% Gain

June 13th, 2011

This Trade Could Break out for a 44% Gain

This stock's story started in 1972 with a nagging stomachache.

To ward off chronic discomfort, a Utah school teacher put a spoonful of cayenne pepper into an easy-to-swallow gelatin capsule. He felt immediate relief, but perhaps more importantly realized his remedy also had business potential. Shortly after, Nature's Sunshine (Nasdaq: NATR) was born.

The first company to encapsulate herbs and sell them as natural remedies, Nature's Sunshine nutritional, herbal, weight management and personal care products are now sold in more than 40 countries worldwide through a network of more than 600,000 independent distributors.

The company appears poised to grow further. According to the National Center for Health Statistics (NCHS), dietary supplement use has widely increased in the past two decades. Between 1988 and 1994, 42% of all Americans used supplements. In 2003 to 2006 this increased to 53%. A recent survey by Wakefield Research found that more that 60% of adults in the United States currently take vitamins or supplements.

Not surprisingly, in 2010, the vitamins and minerals market was valued at $24 billion, worldwide. By 2015, the market is expected to be worth nearly $30 billion. And with baby boomers aging, this number is only expected to keep rising.

From the viewpoint of technical analysis, it hasn't always been sunshine and rainbows for this health-oriented company.

In 2006, when Nature's Sunshine went public, shares quickly ran up from around $8 to $12. By July 2007, they climbed to a peak of $14.45. But they were caught in the downdraft of a plummeting market and plummeted to a low of $3 by June 2009.

Shares have crept back up over time, however, slowly rising from around $5 to $9 to $14 by mid-2010.

Unable to break the $14.75 mark in May 2010, the stock pulled back to near the $8 level in June 2010 and consolidated there for nearly a year, until May 2011.

The stock is now just emerging from what looks to be a multi-month basing pattern. This basing pattern appears as a long “U,” marked by support near $8 and resistance on either side of the pattern, at about $14.75.

Shares have hit an all-time high of $14.95 after bullishly breaking $14.75 resistance during the June 6 trading week. With no historical resistance in sight, the stock could move much higher.

According to the measuring principle for a basing pattern, calculated by adding the height of the pattern to the breakout level, the stock could reach a price target of around $21.50 ($14.75 – $8 = $6.75; $6.75 + $14.75 = $21.50). At current levels, this price target represents a 44% gain.

The herbal-wellness company also looks fundamentally strong.

In early May, the company reported solid first-quarter results. Due to growth in existing markets and expansion into emerging markets, revenue for the period increased 7% to $92.8 million, from $86.8 million in the year-ago period.

For the full 2011 year, analysts project revenue will increase about 4.8% to $366.7 million, from $349.9 million last year. By 2012, analysts project international growth will drive revenue up a further 5%.

The earnings outlook is equally strong.

Due to decreased general administrative and operating costs, first-quarter earnings rose 38.7% to $0.43 per share, from $0.31 in the year-ago quarter. For full-year 2011, analysts expect earnings to more than double to $1.15, from $0.54 the prior year. By 2012, earnings are projected to increase an additional 4.4%, to $1.20.

The stock is also attractively valued, based on its forward price-to-earnings (P/E) ratio of 12.5 and its price-to-sales (P/S) ratio of 0.7. In comparison, competing nutritional products company Herbalife (NYSE: HLF) has a forward P/E of about 15.5 and a P/S ratio more than double Nature's Sunshine's, at around 2.2.

Furthermore, Nature's Sunshine has a strong balance sheet, with $61.2 million in cash and no long-term debt. This liquidity gives the company the financial wherewithal to continue developing its product line.

Action to take –> Having just bullishly broken out of a basing pattern, I believe the stock presents a limited-time trading opportunity, with the potential to make as much as 44% for traders.

Uncategorized

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