In most cultures, profit is seen as the outcome of exploitation of some individuals by some other individuals. Hence, anyone who is seen as striving to make profits is regarded as bad news and the enemy of society and must be stopped in time from inflicting damage. Profit, however, has nothing to do with exploitation — it is about the most efficient use of real funding or real savings. Profit as such should be seen as an indicator as it were, with respect to whether real savings are employed in the best possible way, as far as promoting people’s life and wellbeing is concerned. If the employment of real savings results in the expansion o...
The US dollar softened across the board in thin holiday markets. News developments were light and the dollar’s decline did not seem to be sparked by anything particular. Commodity prices moved higher, though oil consolidated its recent gains. News that China had ordered the closure of its largest copper producer (Jiangxi Copper) for at least a week to cut the winter pollution underpinned prices. Prices rose to a fresh three-year high before profit-taking was seen in North America. Still the advance seems set to extend for 15 consecutive sessions. Anticipation of strong demand as the synchronized global expansion was the main fuel ...
One thing is for sure, when Dr.Copper’s price is falling, the silence from prognosticators is deafening; but when it’s rising it is the greatest indication of the global growth narrative the world has ever known. However, there’s a hole in that story… LME Copper prices are up for 9 straight days – the longest winning streak since 2004 – (and 13 of the last 14 days) pushing prices above $7,200 intraday – the highest since 2014… And given copper’s rip higher relative to gold, based on DoubleLine’s Jeff Gundlach’s favorite chart, 10Y yields should be drastically higher to ref...
Note: The NYSE has released new data for margin debt, now available through November. The New York Stock Exchange publishes end-of-month data for margin debt on the NYX data website, where we can also find historical data back to 1959. Let’s examine the numbers and study the relationship between margin debt and the market, using the S&P 500 as the surrogate for the latter. The first chart shows the two series in real terms — adjusted for inflation to today’s dollar using the Consumer Price Index as the deflator. At the 1995 start date, we were well into the Boomer Bull Market that began in 1982 and approaching the start o...
I published an article/novella on TalkMarkets as Part I of this series on the lodging industry, Hot Hotel Stocks? Look Before You Leap. I recommend you read that first article in order to see just how hotels are typically owned, managed and marketed. It isn’t what most people assume. Part I provides the background in which hotels operate — company owned, managed and branded; investor group owned, externally managed and externally branded; franchised, etc. In it, I also discuss how the industry is rapidly evolving, and provide my investment suggestions for your further due diligence. When you return to this Part II article, begin here...
Everybody and their dog is buzzing about Bitcoin, whether they’re investing analysts or not. So I’ll toss in my two pennies. Like most everybody, I thought it was a bizarre scheme when I first became aware of it. I hadn’t heard of blockchain though, and the two are different animals. Blockchain is the enabling technology for cryptocurrencies, but likely will be the enabling technology for all the business world of the future. It’s just making its debut into our consciousness with a screwball thing like Bitcoin. There is a school of thought that goes like this, “Blockchain is to value now as the internet was to in...
Everybody and their dog is buzzing about Bitcoin, whether they’re investing analysts or not. So I’ll toss in my two pennies. Like most everybody, I thought it was a bizarre scheme when I first became aware of it. I hadn’t heard of blockchain though, and the two are different animals. Blockchain is the enabling technology for cryptocurrencies, but likely will be the enabling technology for all the business world of the future. It’s just making its debut into our consciousness with a screwball thing like Bitcoin. There is a school of thought that goes like this, “Blockchain is to value now as the internet was to in...
Although USD/JPY came back above the long-term line, we didn’t notice significant increases in the following days. Will this show of currency bulls’ weakness result in another repetition of what we already saw in the past? EUR/USD Looking at the daily chart, we see that the overall situation in the short term hasn’t changed much since our last Forex Trading Alert was posted as EUR/USD is trading in the blue consolidation. Such price action makes the picture a bit unclear, however, the CCI and the Stochastic Oscillator generated the sell signals and the exchange rate remains under the resistance zone created by the 76.4% and 78.6% Fibona...
The Fed has to begin cutting the fat off its balance sheet. Monetary economists have spent the past decade debating the pros and cons of the Fed’s “bloated $4.5 trillion balance sheet.” Does a large balance sheet make monetary policy more effective? Or should the Fed sell off its assets and return its more modest pre-QE balance sheet? Often overlooked in this discussion is the negative impact the Fed’s large balance sheet might have on bank lending to the private sector, and hence real economic growth. Both have been sluggish since 2008. And the Fed’s $4.5 trillion balance sheet is partly to blame. Financial systems play a critic...