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Finance 0
The Next Bankruptcy To Hit Your Portfolio
There’s an old saying that if you owe the bank $1 million, you have a problem. But if you owe the bank $100 million, then the bank has a problem. That’s the situation we’re in today. States around the country have racked up outrageous unpaid balances for their pensions. Few of them have any plan for digging out of the hole. Since they have no plan, they’re creating issues for everyone who might be called upon to help them make good on their obligations. Even if you don’t live in one of these states, you might still have a problem. In effect, the states owe a lot of money, and all of us are the bank! Some states, like Rhode Island, t... -
Finance 0
The Great Central Bank Permabubble
A considerable amount of time has passed since the financial crisis of 2008 and the “great recession” that followed. March 2016 marks the seventh year since the economy began its long, slow recovery and the current bull market in stocks began. The current economic recovery and stock price gains have been accompanied by a considerable degree of skepticism, however. Many have argued that we’re in the least-respected bull market in history, and discredited naysayers with nicknames like “permabear” and “Dr. Doom.” In this article I will take a long-term view of the pros and cons regarding the past and current state of the U.S. econo... -
Finance 0
The U.S. Oil Weapon: A Threat To China
Written by Tingbin Zhang, Zhonghua Yuan Institute China’s island building on the four-mile-long and two-mile-wide Subi Reef in the South China Sea has put The U.S. in a tight spot. The reef lies within the 200-mile international limit of the Philippines and is only 26 miles from a Philippino occupied island. To protect its ally from China’s aggression, the U.S. will be left with little choice but to constrain China by military means. However, it is not likely that the U.S. will directly engage China in war in the foreseeable future, because the U.S. dominates China with its superior naval and air force and the only way for China... -
Finance 0
Post-Payrolls Reaction: Sell Everything, Buy Dollars
The most obvious reaction to the “great” drop in the unemployment rate and “huge miss” in payrolls is a rise (yes rise) in rate-hike odds for 2016. This appears to be why the Dollar is spiking and bonds, stocks, crude, gold and everything else is being sold… Sell Mortimer Sell… oh and buy dollars…... -
Finance 0
Employment Details Better Than The Headlines
The U.S. created fewer jobs than anticipated and the December gain was revised lower. However, the other details were favorable–better than expected. The unemployment rate ticked down to 4.9%, a new cyclical low, despite the rise in the participation rate (62.7% from 62.6%). Average hourly earnings were stronger than expected at 2.5%. The consensus expected a 2.2% year-over-year pace. The December pace was revised to 2.7% from 2.5%. The average weekly hours also ticked up to 34.6 from 34.5 hours. It does not sound like much, but with over 150 mln workers, a 6 minute a week increase translates to around 400k full-time equivalents. T... -
Finance 0
Thoughts On MetLife And AIG
In some ways, this is a boring time in insurance investing. A lot of companies seem cheap on a book and/or earnings basis, but they have a lot of capital to deploy as a group, so there aren’t a lot of opportunities to underwrite or invest wisely, at least in the US. Look for a moment at two victims of the Financial Stability Oversight Council [FSOC]… AIG (AIG) and Metlife (MET). I’ve argued before that the FSOC doesn’t know what it is doing with respect to insurers or asset managers. Financial crises come from short liabilities that can run financing illiquid assets. That’s not true with insurers or asset managers. Photo ... -
Finance 0
The Stock Whisper Of The Day: SPY, PBR, BP, AAPL
Hot stocks of the day: SPY, PBR, BP, AAPL. Video Length: 00:03:49... -
Finance 0
Gold Is Looking Promising But Don’t Expect A Straight Up Run
A preview of this weekend’s show The Gold and Oil Guy, Chris Vermeulen provides his outlook on gold. For the full interview on the weekend show we also cover the movements in the oil price. Audio Length: 00:05:43 Your browser does not support the audio tag.... -
Finance 0
Non-Farm Payrolls Poor 151k, But Wages Up 0.5%
A mixed jobs report: job gains are poor with 151K but the unemployment rate is down to 4.9% and with a rise in the participation rate to 62.7%. Wages are surprisingly higher as well. The U.S. dollar is strengthening after the initial slide. The U.S. was officially expected to enjoy a gain of around 190K jobs in January 2016, yet official expectations may have been lower after the terrible and dollar-downing services sector report. The unemployment rate carried expectations of remaining at 5% while wages were predicted to advance by 0.3% m/m The U.S. dollar managed to stabilize ahead of the release. — lots more coming — Data (updated) N... -
Finance 0
Morning Call For February 5, 2016
OVERNIGHT MARKETS AND NEWS March E-mini S&Ps (ESH16 +0.07%) are up +0.16% and European stocks are up +0.32% ahead of the monthly U.S. payrolls report. Equity prices have been tracking crude oil prices for direction and Mar WTI crude (CLH16 +1.23%) is up +1.29%. Gains in European stocks were limited after German Dec factory orders declined more than expected. Asian stocks settled mixed: Japan -1.32%, Hong Kong +0.55%, China -0.63%, Taiwan closed for holiday, Australia -0.08%, Singapore +2.53%, South Korea +0.17%, India +1.14%. Japan’s Nikkei Stock Index fell to a 2-week low as bank stocks fell after Citigroup cut its ratings on Japan...
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