Commodities Cycle Won't Be Over for Years and Food Crisis Looms, Rogers Says

by Peter Gorenstein in Investing, Newsmakers, Commodities


Jim Rogers, famed investor and best-selling author, announced the start of a global commodities rally in 1999. It turned out to be a heck of call: Since then, commodities have dramatically outperformed stocks.

Just this year, gold has hit record highs above $1000 per ounce, copper has nearly doubled and oil has rallied sharply off its March lows. So does Robers still believe in the commodity boom?

You bet. "The story is not over, not for a while," he tells Tech Ticker in this video clip. "I don't see any reason it's going to be over for a few years because no one is bringing new supply on stream."

Commodities Cycle Won't Be Over for Years and Food Crisis Looms, Rogers Says

by Peter Gorenstein in Investing, Newsmakers, Commodities


Jim Rogers, famed investor and best-selling author, announced the start of a global commodities rally in 1999. It turned out to be a heck of call: Since then, commodities have dramatically outperformed stocks.

Just this year, gold has hit record highs above $1000 per ounce, copper has nearly doubled and oil has rallied sharply off its March lows. So does Robers still believe in the commodity boom?

You bet. "The story is not over, not for a while," he tells Tech Ticker in this video clip. "I don't see any reason it's going to be over for a few years because no one is bringing new supply on stream."

It's a V! Recovery "A Lot Stronger" Than Consensus, ECRI's Achuthan Says

by Aaron Task

Good news for those worried about the economy: "We are in the early stages of the recovery and it looks to be a lot stronger" than the consensus for modest 2%-3% GDP growth, says
Lakshman Achuthan, managing director of the Economic Cycle Research Institute (ECRI).

Furthermore, the recovery will be "V-shaped" and is now "virtually unstoppable" - at least through the first half of 2010 -- Achuthan says, citing a "positive contagion" in the economy right now, based on leading economic indicators. Most notably, the ECRI's index of Weekly Economic Indicators just hit a new record high.

Warren Buffett's $3 Billion Goldman Anniversary

By: Alex Crippen
Executive Producer

CNBC

Warren Buffett and Goldman Sachs: Golden Anniversary
It's 12 months later and Warren Buffett's Berkshire Hathaway is $3 billion richer.
One year ago today, on September 23, 2008, with the financial world still reeling from the collapse of Lehman Brothers just days before, Buffett stunned Wall Street with a massive vote of confidence for Goldman Sachs.
In a late-day news release, Goldman announced a private deal to sell Berkshire $5 billion of perpetual preferred stock. In effect, Berkshire was giving Goldman a massive loan. And you don't loan that kind of money to a firm you think could follow Lehman down the drain.

Rogers: We Need More Lehmans

By: Dan Weil

Money News

Investor extraordinaire Jim Rogers says the financial system needs more failures like Lehman Brothers to restore a functioning free market.
The chairman of Rogers Holding wrote in the Financial Times, “We need some more Lehmans so we can get out of this.”
During the last 20 years, “Greenspan and Bernanke introduced crony capitalism to the West, which is leading to a lost decade(s),” Rogers writes.
“Market fundamentals are that failures should collapse and be replaced by creative new forces rather than being propped up as zombies. Financial institutions have been failing for centuries and the world has survived.”

Bill Gross: Sell Equities, Buy Treasuries

Edward Harrison

Seeking Alpha

Bill Gross is a bond man. In fact, he is often called the “Bond King” because Pimco, the organization where he is founder and Co-Chief Investment Officer, is the largest bond fund in the world. In Bondland, what Gross says has a lot of weight.
And Gross has been talking about a “new normal” of deleveraging, deglobalization and reregulation. In his view, this means weak consumer demand counterbalanced only by heavier government intervention, leading to slow growth for the foreseeable future (See my post ‘Gross: The new normal for “the next 10 years and maybe even the next 20 years”’). In essence, he sees a scenario that is bullish for bonds (especially longer duration types like the 10-year and the 30-year) but not particularly bullish for shares.

Future of Polish-US relations

The shape of Polish-US relations and what the future holds in store for Polish culture.

Polish-US relations is the topic taken up by several papers. Analysts wonder if Washington’s decision to abandon plans for a missile shield installation in Poland will prove to be a setback in these relations. US analyst George Friedman claims in the tabloid FAKT that nothing has changed so far. ‘From the tactical point of view, the anti-missile shield was not that important for Poland’, he writes. It was more of a symbolic significance. What is really important is the shape of US-Russian relations. Moscow will most probably ask for more gestures from Washington and will want to have a final say on affairs with Ukraine and Georgia.

The BMD Decision and the Global System

By Stratfor

he United States announced late Sept. 17 that it would abandon a plan for placing ballistic missile defense (BMD) installations in Poland and the Czech Republic. Instead of the planned system, which was intended to defend primarily against a potential crude intercontinental ballistic missile (ICBM) threat from Iran against the United States, the administration chose a restructured system that will begin by providing some protection to Europe using U.S. Navy ships based on either the North or Mediterranean seas. The Obama administration has argued that this system will be online sooner than the previously planned system and that follow-on systems will protect the United States. It was also revealed that the latest National Intelligence Estimate finds that Iran is further away from having a true intercontinental missile capability than previously thought, meaning protecting Europe is a more pressing concern than protecting the United States.

Shiller Says We Need More Research On Economic Bubbles

With the failure of current economic models to give adequate warning of the current financial crisis, Robert Shiller says we need more research of bubbles and what their role should be in economic models. If we had a better understanding of bubbles, could we prevent them from reaching dangerous levels or detect trouble much sooner? The following article summarized by the Economist's View discusses this topic.
Robert Shiller says economists and their models need to take bubbles seriously (compare Dani Rodrik's "Blame Economists, not Economics"):

Meredith Whitney: At Least 300 More Banks To Fail

The Daily Bail

I stumbled across this clip from Friday's Good Morning America with Diane Sawyer and Meredith Whitney. It's a good opportunity to talk about Sawyer's intelligence. She has none. (Editor's Note: I got stories but I'm not talking.) Whitney reiterates her thesis that home prices have 25% further to fall and that consumer credit contraction will keep the recovery weak. Sawyer seems almost shocked by the pessimism, as though her assistant never explained to Meredith that you're not supposed to tell the truth on morning TV. She recovers in time to ask MW for one piece of 'advise' for everyone out there.

Finding the Policy Exit

By Nouriel Roubini

There is a general consensus that the massive monetary easing, fiscal stimulus, and support of the financial system undertaken by governments and central banks around the world prevented the deep recession of 2008-2009 from devolving into Great Depression II. Policymakers were able to avoid a depression because they had learned from the policy mistakes made during the Great Depression of the 1930’s and Japan’s near depression of the 1990’s.

Gross: Stock Market Due for Pullback

By: Dan Weil

Money News

Bond guru Bill Gross says stocks have far outrun the economy and are thus overvalued.
He compared the market over the past 12 months to a choice between historical comedians Will Rogers and Barney Fife.
Fife, of course, was the hapless deputy on the 1960s comedy "The Andy Griffith Show." And Gross opted for him.
“We've got a Barney Fife market,” he told CNBC.

Extraordinary Popular Delusions . . .

. . . and the madness of politicians pitching banker pay curbs.

Meetings like the G-20 summit this week in Pittsburgh aren't famous for their accomplishments, but this one bids to be different in at least one area: Cementing the notion that banker paychecks were the financial weapons of mass destruction that blew up the markets last year.

Stiglitz, Sen, and the End of Recession

by: Michael Mandel

Most forecasters expect third quarter real GDP growth to be positive, perhaps as much as 3%. This will be widely hailed as a sign that the nasty recession of 2008-2009 has come to an end. Indeed, the Fed’s statement today that “economic activity has picked up” seems to fuel the belief that the recovery has started.

Top Five IPOs of 2009 (Part I)

Tate Dwinnell

Seeking Alpha

The first half of 2009 brought us some memorable IPOs, but for the most part it was forgettable. As we approach the final quarter of the year with a flurry of IPOs expected to price in the coming days, I thought I’d rank what I think are the top IPOs of 2009. Please note that these are not ranked solely on performance, but rather on fundamentals such as earnings and sales growth, ROE and margins. No, this is not an extremely scientific ranking. You data junkies can crunch the numbers and run through your algorithms elsewhere.

South Africa’s Stocks Rally ‘Not a False Start,’ Says Sanlam

By Janice Kew

Sept. 22 (Bloomberg) -- South African stocks, which have rallied 41 percent since this year’s low on March 3, are likely to rise further, even as the pace may moderate, according to Sanlam Private Investments.

“This is not a false start,” said Alwyn van der Merwe, who helps manage the equivalent of about $4.3 billion as director of investments at the unit of Sanlam Ltd., the largest South African-owned insurer. Even so, the momentum of the FTSE/JSE Africa All Share Index’s rally now depends on companies’ improved earnings outlook, he said.

African Development Bank’s Kaberuka Calls for Global Stimulus

By Tian Huang and Margaret Brennan

Sept. 22 (Bloomberg) -- The African Development Bank, the Tunis-based lender, is pushing for global economic stimulus to help pull African countries out of the financial crisis, bank president Donald Kaberuka said.

“What we are saying to governments around the world is let us work together,” Kaberuka said in an interview with Bloomberg Television.

The global financial crisis triggered South Africa’s first recession in 17 years while demand for commodities slumped in countries such as Nigeria, Africa’s biggest oil producer, and Zambia, the continent’s largest copper producer.

A “synchronized global approach that doesn’t leave out any part of the world” and investing in African infrastructure would be a boon for poor countries in the region, Kaberuka said.

A fragile rebound for Asia

Bank raises growth forecast, but long-term health requires renewed demand in export markets

BRIAN MILNER

Asia's emerging economies have rebounded from the global recession faster than anyone expected, even though their major export markets continue to languish.
But much of the growth spurt that began in earnest in the second quarter stems from heavy government spending and other temporary initiatives to stimulate domestic demand, and the region has yet to shake its dependence on the exhausted consumers of the more advanced economies.

The more of us the merrier

Arthur Sinodinos

Article from: The Australian

LAST week's announcement of revised population projections for Australia is good news on economic, social and strategic grounds. Rather than focus on potential downsides, we should speculate on the exciting possibilities that can flow from such a development.
First and foremost, a larger population will enhance our capacity to exercise more influence in what is likely to be a volatile international environment over coming decades.

Rosenberg: Stocks Are Overvalued And "Tremendously Risky"

Henry Blodget

David Rosenberg has been wrong about the market since March, but he isn't backing down. Here he is in the FT, as bearish as ever: Usually at bear market troughs, the S&P 500 goes to silly cheap levels. It did not this time round and, six months and 60 per cent later, there is yet again, in 2007 style, tremendous risk in this market. Never before has the stock market surged this far, this fast, between the time of the low and the time the recession (supposedly) ended. What is “normal” is that the rally ahead of the recovery is 20 per cent. This market is now trading as if we were in the second half of a recovery phase, yet it has not even been fully ascertained the downturn is over...

Green Investing Is Paying Off

Eco-friendly investments, from individual stocks to mutual funds and ETFs, have outperformed the Dow and S&P 500 this year

By Mark Scott (Business Week)

Stock markets from New York to London are finally recovering. Appetite for risk is returning. And recent improved corporate results have buoyed hopes that the global economy is on the mend. Investors looking to get back into the market are in search of safe growth opportunities—and for many, eco-friendly investments are becoming more attractive as U.S. President Barack Obama and other world leaders put increased emphasis on tackling global warming.

Roubini, Zuckerman, and Ferguson Debate the End of the Recession

wallstreetpit.com

Is the end of the recession finally at hand? Economics Professor, Nouriel Roubini; US News & World Report Editor-in-Chief, and real estate billionaire, Mort Zuckerman; and economic historian Niall Ferguson discuss with CNN’s Fareed Zakaria the current state of the economy, the looming CRE crisis, greenback’s status, and why the $787 billion economic stimulus plan hasn’t created much stimulus. According to their opinion, adding a stimulus package on top of an already existing U.S. fiscal crisis, which was structural in nature, wasn’t the right strategy. Their consensus is that the majority of policies and efforts of lending support to demand and laying the groundwork for a return to growth, were not structurally sound and had very little to do with the severity of the recession. Even when the recovery starts it won’t feel much like one they say, because the job markets — with unemployment projected at peaking at 11% — will remain weak until businesses gain confidence in the upturn’s sustainability.

Best month in years gives markets hope

NECN/ABC) - The bulls are loose on On Wall Street, as the Dow Jones closed with the best month in nearly 7 years.

The NASDAQ has not had a July as good since 1997.

"You have to remember you can get double digit returns when you are coming from such a low point. The move is exceptional but it is in the face of double digit downward moves that we had prior," Ben Willis of VDM Institutional Brokerage said.

But could this still be a signal the worst of the recession is over? The latest economic analysis from Washington shows a 1-percent negative growth rate for the country -- much less than was feared.

Global Markets in Review: Forwards and Upwards for Risky Assets

Seeking Alpha

For some reason the lyrics of Electric Light Orchestra’s classic, Livin’ Thing, keep resounding in my head: “You took me, ooh, woah, higher and higher, baby. It’s a livin’ thing … ” Followed by: “It’s a terrible thing to lose … ” But let me get on to the review of the financial markets …

Investors (or should I say “Johnny-come-latelies”?) last week again favored the reflation trade on the back of better-than-expected U.S. earnings announcements and economic data, indicating that the trough of the recession might be behind us, or at least be stabilizing at depressed levels.

Newsweek’s cover declared: “The recession is over”, but a footnote stated “Good luck surviving the recovery”, implying a hard and treacherous slog ahead - note the pin below the “liquidity-inflated” balloon.

Beware of Big Ideas

Newly nervous post-Soviet states crack down on Western schools.
By Owen Matthews and Anna Nemtsova | NEWSWEEK

A generation ago, as communism was collapsing and the leaders of the former Soviet empire were scrambling to create prosperous nations from the ruins, most agreed that bringing in Western-style universities was the key to improving local business and tech culture. Whether it was a government of former dissidents in Budapest or old Soviet strongmen like Nursultan Nazarbayev in Kazakhstan, many leaders began welcoming in foreign professors and U.S. academic practices.

A slew of American- and international-style universities sprang up across the region—some, like the Central European University in Budapest, funded by individuals such as the financier George Soros; others, like Kyrgyzstan's American University of Central Asia, partly funded by the U.S. State Department. Several, like the short-lived American University of Baku, Azerbaijan, immediately foundered in suspicion, but surprisingly, most flourished. By 2008, the Kazakhstan Institute of Management, Economics and Strategic Research (known as KIMEP), for example, boasted 110 foreign professors teaching everything from business administration to international journalism. Another Nazarbayev-supported school, the Kazakh-American Free University, managed last year to place all of its graduates in ministries or top multinationals.

Company debt looks more attractive than stocks

Stocks have best quarter in 10 years, oil has best three months in 19 years

By Nick Godt, MarketWatch

NEW YORK (MarketWatch) -- While U.S. corporate bonds have seen their best quarter in years, it wasn't as good as the show-stopping performance of U.S. equities, and some see this as a problem for an extended stocks rally.

For the quarter to date, the S&P 500 index /quotes/comstock/10u!spx.x (SPX 916.22, -10.43, -1.12%) is up 14.7%, its best quarter since 1998.

Corporate bonds, meanwhile, have jumped 11.26% this quarter, as fear and panic about the possibility of falling into a Depression subsided. That helped to lower their yields, which move inversely to price, but not enough to make them less attractive than stocks.

"The biggest challenge equities face at the moment may not be the economy, it's the triple-B corporate bond rate," said Jack Ablin, chief investment officer at Harris Private Bank, in a note.

Is China faking economic recovery?

Venkatesan Vembu / DNA

Hong Kong: Cynical crunchers of statistical data believe there are three degrees of 'mistruths': lies, damned lies and statistics.

Increasingly, economy watchers are beginning to believe falsehood could go a step beyond: China's GDP numbers. Ever since the official Chinese statistical agency announced earlier this year that the country's GDP grew 6.1% in the first quarter of 2009, there have been murmurs of scepticism about the authenticity of those figures. A few have observed that the GDP data are inconsistent with other data, such as weak power production.

Those murmurs have in recent weeks turned into a high-decibel chorus that is beginning to openly rubbish the validity of the official numbers.

"The Q1 6.1% GDP outturn is simply a lie," notes Albert Edwards, chief global strategist, Societe Generale. "It helps explain why the Chinese data is derided by so many economic commentators

Stratfor unveils another spooky story of Russia's imminent supremacy in Europe

There is no such notion as a former intelligence officer. An intelligence officer always remains an intelligence officer. This notion becomes particularly clear when you read the so-called “analyses” from the US Stratfor (Strategic Forecasting) agency. The agency collects information to look into the future of various regions of the globe. Stratfor’s founding father, George Friedman, is a former professor of geopolitics.

The agency’s products – forecasts and predictions – are especially important for companies involved in global trade. Stratfor does not expose the names of its clients – it only says that it cooperates with both large corporations and private individuals.

Stratfor surprised its clients with an analytical note in 2004, which said that the Bush administration addressed to the Kremlin with a suggestion to dispatch a considerable military contingent to Iraq or Afghanistan. The sources of the agency close to Russia’s Security Council said that then-President Putin accepted the offer from the White House and even ordered the General Headquarters to prepare the plan of the operation by the end of July 2004.

'Green shoots could easily reverse'

The rise in mortgage rates in the US is a worrying trend, as it hinders investment and creates problems for potential home buyers. Noted Robert Shiller, who lends his name to the S&P Case-Shiller Index, feels the increase is affecting home sales.

Professor Shiller, who teaches at Yale University and wrote the classic 'Irrational Exuberance' in 2000, told ET Now that predicting the direction of longer-term rates is very difficult.

How much of an impact does rising mortgage rates have on consumers?

Well, I think, there is a big psychological impact because people see these rising rates as a sign of trouble. That the govt is borrowing heavily and now the borrowing rates are going up. It also has an impact on people’s willingness to buy homes. And the oil price is the most significant down news offsetting this green shoot news

Do you expect rates to keep rising?

‘Dangerous Time’ to Avoid Stocks, CLSA’s Napier Says (Update1)

By Patrick Rial

June 25 (Bloomberg) -- Stock investors can look forward to another few years of gains as central banks engineer a return to inflation, providing a tailwind for global markets, according to CLSA Ltd. strategist Russell Napier.

An acceleration in inflation from zero to 4 percent is historically associated with gains in stocks as the benefits of rising prices accrue to profits instead of labor earnings or debt holders, said Napier, the author of “Anatomy of the Bear,” a study of bear markets.

Thereafter, a bearish cycle that began in 2000 will resume as the Federal Reserve allows inflation to spiral out of control and foreign investors stop buying U.S. sovereign debt, sending the Standard & Poor’s 500 Index to an eventual bottom of about 400, Napier predicts. An index of U.S. consumer prices dropped 1.3 percent in May from the previous year, the Labor Department said on June 17. That was the steepest decline since 1950.

“We’re likely to get strong broad money growth, and I think it’s a very dangerous time be out of the equity markets,” the Edinburgh-based strategist said in a telephone interview yesterday. After a few years of gains “the Fed will launch its final attack on inflation and it will take us into a fairly terrible situation. They’ll let go and we’ll head for inflation.”

Investors eagerly await companies' earnings

By Adam Shell, USA TODAY
NEW YORK — Coming soon to Wall Street: a key quarterly exam on corporate profitability. At stake: the test results could determine if the stock market's recovery rally will fizzle or morph into a sustainable bull run.

On the eve of the second-quarter earnings reporting season, investors are bracing to see if the early bet they made on an economic rebound — and which jumpstarted a 40% stock rally — will actually be reflected in profit reports and companies' commentary about the future.

How much money companies made in the second quarter and how they made it will offer the first true snapshot whether the so-called "green shoots" recovery theory actually translated into better business conditions and bigger-than-expected earnings.

Warren Buffett Says American Economy is a Shambles

By Dan Denning

Yesterday didn't turn out so bad after all on the ASX. Stocks finished slightly up, as did the Aussie dollar and oil. Today might be a different story, though.

For starters, billionaire investor/guru/jovial-grandfatherly-figure Warren Buffett has said the American economy is a "shambles." Buffett told CNBC that the worst of the financial crisis peaked late last year (we're not so sure). But the economic crisis? That's still in full flight.

"I get figures on 70-odd businesses, a lot of them daily," said Buffett. "Everything that I see about the economy is that we've had no bounce. The financial system was really where the crisis was last September and October, and that's been surmounted and that's enormously important. But in terms of the economy coming back, it takes a while."

"A while," is not a precise unit of time. But Buffett is probably right. "There were a lot of excesses to be wrung out and that process is still underway and it looks to me like it will be underway for quite a while. In the (Berkshire Hathaway) annual report I said the economy would be in a shambles this year and probably well beyond. I'm afraid that's true."

Americans saving more and more

By Alison Sider and Deirdre Bolton | Bloomberg News

The U.S. savings rate may more than double to 11 percent in the next year, slowing consumption and inhibiting a recovery in the world's largest economy, said New York University economist Nouriel Roubini.

"If there is an adjustment to 11 percent in the next 12 months, you get thrift consumption, the recession becomes deeper," Roubini said in an interview Wednesday on Bloomberg Television.

U.S. consumers saved 5.7 percent of their disposable income in April, the highest level since 1995, as a recession that began in December 2007 and accompanying financial crisis discourages spending. The country's savings rate averaged 1.7 percent in the past decade.

Roubini, who correctly predicted the damage from a subprime mortgage meltdown, also forecast the U.S. unemployment rate would peak at 11 percent.

Dr. Doom Has Some Good News

by James Fallows

On March 28, 2007, Federal Reserve Chairman Ben Bernanke appeared before the congressional Joint Economic Committee to discuss trends in the U.S. economy. Everyone was concerned about the “substantial correction in the housing market,” he noted in his prepared remarks. Fortunately, “the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.” Better still, “the weakness in housing and in some parts of manufacturing does not appear to have spilled over to any significant extent to other sectors of the economy.” On that day, the Dow Jones industrial average was above 12,000, the S&P 500 was above 1,400, and the U.S. unemployment rate was 4.4 percent.

That assurance looks bad in retrospect, as do many of Bernanke’s claims through the rest of the year: that the real-estate crisis was working itself out and that its problems would likely remain “niche” issues. If experts can be this wrong—within two years, unemployment had nearly doubled, and financial markets had lost roughly half their value—what good is their expertise? And of course it wasn’t just Bernanke, though presumably he had the most authoritative data to draw on. Through the markets’ rise to their peak late in 2007 and for many months into their precipitous fall, the dominant voices from the government, financial journalism, and the business and financial establishment under- rather than overplayed the scope of the current disaster.

Buying Like Buffett Beats Investments in Berkshire (Update1)

By Ari Levy and Erik Holm

June 25 (Bloomberg) -- Warren Buffett followers who invest like the billionaire instead of with him would have earned higher returns since the bear market bottomed more than three months ago.

Berkshire Hathaway Inc.’s 18 percent advance since U.S. equity indexes reached their lows on March 9 lags behind 16 of the company’s top 20 stock holdings. A $1 million investment mimicking Berkshire’s portfolio would have produced a $724,000 profit through today, compared with a $184,600 gain for the same-sized investment in Berkshire shares. Buffett is chairman and head of investing at Omaha, Nebraska-based Berkshire.

Buffett, 78, has seen long-standing equity positions in Wells Fargo & Co. and American Express Co. more than double from their March lows after losing over half their value in the 12 months prior. Companies Berkshire owns outright, meanwhile, had declining sales amid the global recession, and the firm’s losses from derivative positions on corporate and municipal debt may not reverse as quickly as those tied to stock markets.

Hedge, Pension Funds to Lift Commodity Investments, BarCap Says

By Chanyaporn Chanjaroen

une 25 (Bloomberg) -- Commodity investments from hedge and pension funds will probably expand as investors have become more optimistic on a global economic rebound, Barclays Capital said.

An index of the net long position in 20 raw materials monitored by the U.S. Commodity Trading Commissions rose to its highest since July this month. The Reuters/Jefferies CRB index has advanced 9 percent this year, recovering from the worst slump ever in 2008.

Investing in 'The New Normal'

In this age of diminished expectations, how should you invest?

By Christopher Davis

In May, real estate developers met in Las Vegas to discuss the future of the American shopping mall. Judging by The New York Times' account of the conference, many developers were reluctant (or unwilling) to entertain the idea that the post-financial crisis world could be much different than the environment that preceded it. Not only were they less-than-attentive to environmental and sustainability concerns, they seemed indifferent to the fact that consumer spending had fallen off a cliff and is likely to remain subdued for years to come. Many, though not all, were waiting for things to get back to normal--the way they were before the crash.

Dreadful Stocks to Avoid

Dreadful Stocks to Avoid

By Richard Gibbons

Warren Buffett's first rule of investing is: "Never lose money." To this, he often adds rule No. 2: "Never forget rule No. 1." Of course, following these rules is easier said than done. But Buffett's done pretty well, so it seems unwise to simply dismiss his advice as the semi-coherent ramblings of a man who's read way too many 10-Ks.

I take those rules to heart in my investment strategy. I try to focus my investment dollars on sustainable, undervalued businesses that I can easily understand. Buffett has made more than $40 billion for himself using that strategy, and he's made even more for his partners and shareholders over the years. Do you really need to assume a lot of risk to make more than $40 billion? My answer, and the answer of my colleagues at Motley Fool Inside Value, is "Heck no!" If I make only $40 billion, I'll be perfectly satisfied.

Mexico struggles to make industries competitive

By Noel Randewich

MEXICO CITY, June 22 (Reuters) - Mexico is taking steps against near-monopolies that the government blames for stunting the nation's growth, but it hasn't been easy to wrest control from some big companies.

Dominating Mexico's television industry is tycoon Emilio Azcarraga's Televisa (TLVACPO.MX)(TV.N), which has a 70 percent share of audiences and owns the country's largest cable operators and a satellite operator. Rival TV Azteca (TVAZTCACPO.MX) controls most of the rest of the television market.

And Mexicans joke that it is difficult to go a day without putting money in the pocket of Carlos Slim, who owns the nation's largest telephone operators as well as stores, restaurants, a cigarette maker, an airline, and construction companies that build and manage toll roads.

Last month, President Felipe Calderon announced that Mexico's state power utility would find a private operator to manage a new telecom backbone, piggy-backed on its nationwide fiber optic network.

ANALYSIS-Optimism stalls amid second thoughts on recovery

ANALYSIS-Optimism stalls amid second thoughts on recovery

Reuters News
USA-MARKETS/REVERSAL (ANALYSIS)

By Steven C. Johnson

NEW YORK, June 23 (Reuters) - After months of wishful thinking, investors are nervous again about financial markets and the world economy, and it may take a flurry of much better economic data to make them believe in a sustainable recovery.

Anxiety grew on Monday after the World Bank cut its 2009 global growth forecast, saying the world economy will contract 2.9 percent this year.

That added to a decline that has hit major markets identified with increased risk -- global stock markets, currencies such as the euro, and oil, copper, gold and other commodities.

All three recently hit multi-month highs -- U.S. stocks surged nearly 40 percent from a bear market low hit in March -- as markets bet the worst of the global financial crisis had passed and the world recession was easing.

But these moves stalled this month, leaving the benchmark S&P 500 in the red for the year at Monday's close.

The dollar has also clawed back some of the losses suffered when growing optimism sparked investors to buy the euro and higher-yielding, commodity-linked currencies such as the Australian dollar instead, while U.S. bond yields have retreated from this month's eight-month highs.

For Older Investors, Old Rules May Not Apply

For Older Investors, Old Rules May Not Apply
by Tara Siegel Bernard

provided by
The New York Times

The stock market's damage has already been done. And if you're one of those people near or already in retirement, you already know you're going to have to work longer, save more or spend less.

But what should you do right now with the money you have left? Should you wade back into the stock market, if you bailed out when the market was plunging? Or if you watched your investments drop and then recover a little in the last few months, should you just hold on? What happens if the market doesn't fully recover for a long time? (That happened in Japan in the '90s.)

Where the Pros Are Putting Their Money

On the Street by Rob Wherry (Author Archive)

The stock market finished another decent month -- so why are investors so gloomy?

That's the sense from a major gathering of fund managers and financial advisors in Chicago last week. At the Morningstar Investment Conference, SmartMoney cornered some of the investing world's most influential personalities. The takeaway: Despite the recent run-up in equities, many professional investors think government policies, economic data and corporate earnings reveal the U.S. is still in store for some troubled times.

If you missed any of our extended coverage you can click here to see our Morningstar blog, complete with stories and video interviews. Or, take in these seven highlights:

more in:
http://www.smartmoney.com/Investing/Mutual-Funds/Where-The-Pros-Are-Putting-Their-Money/

3 Huge Value Traps You Must Avoid Today

By Ilan Moscovitz

If you talk to the most successful value investors on the planet these days, you'll notice a common refrain:

"We're … finding bargains galore"
That's Whitney Tilson, whose T2 Partners has earned 7% annually since inception in 1999 versus negative 3% for the S&P 500.

Not to be outdone, superinvestor Warren Buffett penned an op-ed in The New York Times comparing the present to troubled periods like 1932, 1942, and the early 1980s -- all fantastic times to buy stocks.

And I never thought we would see the day when GMO's notorious perma-bear Jeremy Grantham would say, "You are looking at the best prices in 20 years."

The last time that guy was actually optimistic about stocks was in 1982.

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http://www.fool.com/investing/value/2009/05/29/3-huge-value-traps-you-must-avoid-today.aspx

Stock market: 'We're in the yin phase'

According to Chinese philosophy, yin (shadow) and yang (light) are complementary energies that form a universe. It is a convenient mythology that has, over time, been used to help smooth the many paradoxes associated with modern life.

By Carl Stick

In recent years the mythology of yin and yang has been applied to the economic and business cycles

In recent years, it has been applied to understanding of the nature of economic and business cycles. The conclusions may have implications for how we, as investors, steer through torrid times.

The main proponent of this theory is Richard Koo, chief economist of the Nomura Research Institute, and well known for his examination of "Japan's Great Recession", from 1990 to 2005.

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http://www.telegraph.co.uk/finance/personalfinance/investing/shares/5403059/Stock-market-Were-in-the-yin-phase.html

Dreadful Stocks to Avoid

By Richard Gibbons

Warren Buffett's first rule of investing is: "Never lose money." To this, he often adds rule No. 2: "Never forget rule No. 1." Of course, following these rules is easier said than done. But Buffett's done pretty well, so it seems unwise to simply dismiss his advice as the semi-coherent ramblings of a man who's read way too many 10-Ks.

I take those rules to heart in my investment strategy. I try to focus my investment dollars on sustainable, undervalued businesses that I can easily understand. Buffett has made more than $40 billion for himself (less, now, with the market crash) using that strategy, and he's made even more for his partners and shareholders over the years. Do you really need to assume a lot of risk to make more than $40 billion? My answer, and the answer of my colleagues at Motley Fool Inside Value, is "Heck, no!" If I make only $40 billion, I'll be perfectly satisfied.

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http://www.fool.com/investing/value/2009/05/24/dreadful-stocks-to-avoid.aspx

DEEP WALL STREET: The Obama-Geithner Plan Will Work Fine –So Long As The Chinese Do As We Wish

By Deep Wall Street

President Obama met with his august council of outside economic advisors, headed by Paul Volcker, on Wednesday. Thanks to the White House press office, we got our almost daily dose of optimism: POTUS told his advisers that the economy is undergoing a “return to normalcy.” No doubt they felt better and went out and bought some bank stocks, just like every mutual fund manager in the country, further fueling the “stress test rally.”

Is it all–the economic recovery, that is–really just about confidence? Maybe Treasury Secretary Tim Geithner is on to something. His predecessor, Hank Paulson, who supposedly knew a lot about the markets from his decades at Goldman Sachs, nonetheless had an uncanny tin ear when it came to reassuring the financial world.

That is, Paulson’s plan of telling Congress that he needed $700 billion to bail out his Wall Street pals, or the New Great Depression will hit–and then watching cluelessly as Congress voted it down, the first time around–was not a good confidence-building strategy.

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http://foxforum.blogs.foxnews.com/2009/05/23/deep_wall_street_obama_geithner/

3 Stocks on Buffett's Wish List?

Does the Oracle of Omaha want these stocks?

By Ilan Moscovitz

"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread."
-- Warren Buffett, Oct. 16, 2008

It was a tough year for the world's richest man -- according to data from Forbes, Warren Buffett's net worth declined in value by a staggering $25 billion in 2008.

So let's not be too hard on ourselves if we, too, owned a few stocks that lost substantial portions of their value last year. Instead, let's pay close attention to what masters like Buffett are doing on the heels of such a dismal market year.

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http://www.msnbc.msn.com/id/30913683/

More Thoughts on the Fake Recovery

A recent post I published on both Credit Writedowns and Naked Capitalism, “Both initial claims and continuing claims now pointing to recovery,” has left the impression that I am a wild-eyed bull – for which I have been duly smacked about the head.

This is far from the case. A recent post by Nouriel Roubini to which Marshall Auerback alerted me is very much in line with my viewpoint.

I would like to share snippets of that post with you along with some quotes from my own past posts and updated commentary to clarify how I see the economy progressing.

But, I also want to reiterate the point of NOT viewing the economy only through the lens of recent events, and of taking a measured, objective view of data.

Roubini’s post has the delightfully long title, “Green shoots or yellow weeds? A trifecta of risks to the early bottoming out of the recession and short-term economic recovery and to the medium-term actual and potential growth prospects of the global economy.”

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http://seekingalpha.com/article/139336-more-thoughts-on-the-fake-recovery

BlackRock: Financials Have Bottomed

By Dan Weil

Robert Doll, chief investment officer for equities at money management giant BlackRock, thinks financial stocks have bottomed, though the industry isn’t out of the woods yet.

“We are less underweight financials than we were,” he tells CNBC.

“We think financials have indeed bottomed. But… on any rally we see of longer term nature, the financials will go up less than the market.”

That’s because “we still have asset question marks,” Doll says.

“Until we get more time, more write-offs, more capital raised, we think there will be bumps along the way in financials.”

Doll says housing will likely bottom in the second half of the year.

“Without that, it will be tough to have a sustained rally in equities because it will be tough to have a recovery in the economy.”

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http://moneynews.newsmax.com/streettalk/black_rock_financials/2009/05/20/216326.html

Low-quality market rally ripe for a reversal, observers say

Staying power of riskier stocks that are leading the rise is in question

By Dan Jamieson

The market's recent rally is likely to be short-lived.

Since the closing low on March 9, the markets have been led higher by lower-quality stocks and riskier asset classes, such as financial stocks and emerging-market equities.

“I don't think the rally can continue forever on the basis of low quality,” said Robert Doll, the global chief investment officer of equities at BlackRock Inc. of New York.

Market watchers say that it is typical for sectors that sold off the most during a downturn to bounce back the strongest during an initial rebound.

But a new, long-term secular bull market would most likely require new leadership from more attractive industries, market observers said.

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http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20090517/REG/305179974

Bear Leuthold Sees Stocks Rising Sharply

By Dan Weil

Steve Leuthold, a star money manager who earned big money shorting stocks last year, is now a raging bull.

In April, he predicted the Standard & Poor’s 500 Index would reach 1,100 by year-end, a 22 percent gain from Wednesday’s close. Now he thinks the index can reach that level sooner.

“When I said 1,100, people thought I was smoking something,” Leuthold told Bloomberg TV.

“Now it seems like a much more rational thing, and we are seeing many … people that have said, ‘Hey, I’m going to wait until next year when the economy is improving,’ that are now saying, ‘Uh oh, I think we maybe better move before that.’”

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http://moneynews.newsmax.com/streettalk/leuthold_sees_stocks_up/2009/05/21/216977.html

Looking For the Next Global Profit Play? Take a Look at These Emerging Market ETFs

By Mike Caggeso
Associate Editor
Money Morning

Like most investors, Harvard University’s billion-dollar endowment fund took a beating during the global financial crisis. Many investors cashed out, opting for the safety of the sidelines.

But Harvard called a new play.

During the first quarter, Harvard engineered a dramatic shift in its endowment-fund investment strategy - boosting its stakes in some of the most prominent emerging market exchange traded funds (ETFs). Indeed, its largest first-quarter investments included:

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http://www.moneymorning.com/2009/05/20/emerging-market-etfs/

BlackRock Wears Multiple Hats

By LIZ RAPPAPORT and SUSANNE CRAIG,

Laurence Fink has parlayed a lifetime of contacts and computer models into a powerful, controversial role for his firm in the financial crisis.

The U.S. has selected BlackRock Inc., a money manager and risk-advisory firm, to manage mortgage assets once owned by Bear Stearns Cos. and American International Group Inc. Separately, the firm also has been tapped to analyze hard-to-price assets of Freddie Mac and Morgan Stanley, among other financial institutions in the crisis.

Now, the Treasury Department has preliminarily granted BlackRock a coveted second-round interview to become one of a few money managers to buy toxic assets from U.S. banks, using taxpayer money, people familiar with the matter say. Mr. Fink aims to raise as much as $7 billion to invest through the program, which could yield his firm millions of dollars in fees. A Treasury spokesman says it is in negotiations to prequalify several fund managers BlackRock helped shape the government's toxic-asset plan, which critics have said helps vulture investors buy assets on the cheap while exposing taxpayers to the bulk of losses if the investments sour. Meantime, BlackRock continues to manage $132 billion in mortgage assets, some of which have defaulted.

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http://online.wsj.com/article/SB124269131342732625.html

Confessions of a Money Manager: To those who cashed out of the market - there is a way back

by Ray Unger,

Well, this stock market is definitely one for the books. Back in early March, when the Dow Jones Industrial Average was routinely giving up huge hunks of value and investors were panicking in droves, the market suddenly reversed itself and the Dow zoomed 379.44 points, or 5.8 percent. Since then, it's added another 1,370 points, bringing it 26.7 percent above the March 11 low of 6,547.

Now that we're here, what should investors who exited the market do?

If you're a technician -- one who applies arcane formulas using stock prices and transaction volume to construct charts -- the outlook is rosy. According to Stephen Gandel of the Wall Street Journal the "number crunchers are happy." Two prominent technicians in particular were cited in Gandel's article: Mary Ann Bartels of Bank of America/Merrill Lynch, and Lazlo Birinyi, long-time market strategist and regular contributor to Forbes and Bloomberg Personal Finance.

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http://www.madison.com/tct/news/stories/452249

Nobel economics laureate warn of factors affecting recovery

By Channel NewsAsia's Hong Kong correspondent, Leslie Tang

HONG KONG: There may be signs that the global economy is bottoming, but some economists are warning that any recovery will not be quick.

And according to Nobel economics laureate Paul Krugman, domestic demand in Asia may not be strong enough to offset the fall in exports.

He said: "I think we probably have passed the acute phase of the crisis. Most indicators from around the world are now suggesting stabilisation. Not an upturn. We're still heading down, but much more slowly than before."

Speaking at an event to commemorate the 20th anniversary of the Hong Kong's Securities and Futures Commission, Mr Krugman warned that many factors are likely to continue to worsen, which may hinder a quick recovery.

He also noted that unemployment in advanced economies is likely to stay on the rise.

Some analysts have said Asia is well-placed to be the first region to recover from the crisis, but Mr Krugman is not as optimistic.

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http://www.channelnewsasia.com/stories/economicnews/view/431145/1/.html

Two Ways: Will S&P Take a Dive?

by Terry Woo,

Renowned economist David Rosenberg said the S&P 500 could breach the 12-year low it reached in March. Why so glum? Because the economy hasn’t recovered and consumer spending remains weak.

In a Bloomberg television interview, Rosenberg said he’s keeping an open mind and doesn’t know for sure if the index will test a new low. But he isn’t convinced the US is in the midst of an economic recovery, either. He called this latest 9-week rally a “gargantuan short-covering rally.”

Rosenberg, who gained fame as an economist at Merrill Lynch and is now the chief economist and strategist at Gluskin Sheff & Associates in Toronto, said he sees no revival in consumer spending in the second quarter (he isn’t sure where the buying power would come from). He acknowledges there's a large amount of cash on the sidelines, but believes it will be used to pay down debt rather than to chase equities.

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http://www.minyanville.com/articles/spx-sds-fxe/index/a/22777

Joseph Stiglitz: Romania has an edge over other states

Some countries did better than others during the current crisis, with Romania counting to the first category, said Professor Joseph Stiglitz on Thursday, while in Bucharest where he is to deliver an address on the impact of the economic crisis on South-East European countries, at the Central and South-East European Financial Forum organized by Forum Invest.

In the opinion of the winner of the Nobel Prize in economics, Romania was able to resort to regulations on reserve cutting, it had a robust demand before the crisis and a healthy set of banking regulations. Professor Stiglitz believes that the very fact that it is a small state (in comparison with the U.S. - Ed. note) integrated in such a large market like Europe (which however faces problems itself), is yet again an element that benefits our country.

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http://www.actmedia.eu/2009/05/22/top+story/joseph+stiglitz:+romania+has+an+edge+over+other+states+/20840

Pimco Fund Manager Arnott Joins Bear Camp

by Stan Luxenberg

Pimco's Robert Arnott, Legend Financial Advisors' Louis Stanasolovich and the editors of the influential No-Load Fund Analyst say it may be years, or even decades, before stocks return to their historic highs, making bonds more attractive investments.

After last year's stock-market crash, the long-term average returns of equities fell into the single digits. Large-company shares returned an annual average of 9.6% from 1926 through 2008, according to Ibbotson Associates. The gap to bonds has all but evaporated.

Financial advisers for years have clung to a key belief: Over the long term, stocks outdo bonds. While equities may suffer periodic slumps, they also produce tremendous growth. Now a growing minority of advisers and portfolio managers is taking a different view.

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http://www.thestreet.com/story/10502495/1/pimco-fund-manager-arnott-joins-bear-camp.html?cm_ven=GOOGLEN

Searching for the Roots of a Recovery

by Will Swarts

Stocks came into last week having gained 30% from the bottom they hit in early March. But as the week progressed, and traders were presented with a mixed bag of economic and corporate data, it became apparent the rally was quickly losing steam. It didn’t help that on Thursday and Friday Chrysler and General Motors (GM: 1.18, +0.09, +8.25%) announced they would end relationships with almost 2,000 of their dealers. When the closing bell rang on Friday the Dow Jones Industrial Average had shed 300 points, or 3.5% for the week.

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http://www.smartmoney.com/Investing/Economy/Searching-for-the-Roots-of-a-Recovery/

Brazil and China eye plan to axe dollar

By Jonathan Wheatley in São Paulo

Brazil and China will work towards using their own currencies in trade transactions rather than the US dollar, according to Brazil’s central bank and aides to Luiz Inácio Lula da Silva, Brazil’s president.

The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency.

Mr Lula da Silva, who is visiting Beijing this week, and Hu Jintao, China’s president, first discussed the idea of replacing the dollar with the renminbi and the real as trade currencies when they met at the G20 summit in London last month.

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http://www.ft.com/cms/s/0/996b1af8-43ce-11de-a9be-00144feabdc0,dwp_uuid=f6e7043e-6d68-11da-a4df-0000779e2340.html

Beijing’s stimulus measures questioned

By Jamil Anderlini in Beijing

China’s much vaunted Rmb4,000bn economic stimulus package is being delayed by local governments unable to raise their share of financing, according to a report from the state auditor.

The survey, published on Monday, is the first official indication that China’s stimulus measures have not been as effective as the government claims.

The auditor said in some cases local governments had stumped up less than half the funds they had promised for projects in their jurisdictions, even though Beijing had transferred 94 per cent of the money earmarked by the central government for the stimulus plan.

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http://www.ft.com/cms/s/0/5c142cf4-43d2-11de-a9be-00144feabdc0.html?ftcamp=rss&nclick_check=1

Economic Recovery Still Months Away: Roubini, Rogoff

The U.S. economy isn't likely to recover for months, and even then will remain weak for a long time, two well-known economists told CNBC.

Nouriel Roubini, co-founder and chairman at RGE Monitor, also known as Dr. Doom, and Kenneth Rogoff, professor at Harvard University's Department of Economics, both said the economy still faces serious challenges.

"People talk about a bottom of the recession in June, but I see it more like six to nine months from now," Roubini said. "The green shoots everyone talks about are more like yellow weeds to me."

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http://www.cnbc.com/id/30768521

China, el año para entrar

En el escenario de incertidumbre económica que se vive en la actualidad, los expertos de Invesco creen que la economía y la bolsa china estarán entre las primeras en recuperarse, gracias a sus fuertes fundamentales y a su tendencia de crecimiento a largo plazo. En opinión de esta gestora, existen cuatro señales que deben de seguirse para confirmar la recuperación: la mejora de la demanda local y de las exportaciones; el crecimiento de la liquidez global y local; la revisión de los beneficios empresariales y, por último, pero no menor, las valoraciones.

En la primera de ellas, los efectos de las políticas monetarias y fiscales sobre la economía del país asiático serán claves para la recuperación de la demanda local. La confirmación de que se ha tocado el mínimo en el crecimiento interno o en las exportaciones será una buena señal de entrada.

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http://www.fundspeople.com/component/content/article/1256.html

Oil Spike Raises Portfolio Questions

By DAVE KANSAS

Oil prices have shot higher in recent weeks as investors anticipate a rebound in the global economy. While many economists expect the economic rebound to be tepid at first, that has not slowed the advance in oil.

For individual investors, the rise in oil prices means it's a good time to think about the role commodities should play in your portfolio. In the wake of the global financial crisis, commodity prices plunged. Now that the economy is starting to come off the mat, those prices have started rising.

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http://online.wsj.com/article/SB124251684528027290.html?mod=googlenews_wsj

George Soros Q1 Portfolio

George Soros is a macro investor, the trend in his portfolio is worth following. This is his Q1 portfolio update. He is so bullish with oil that he puts almost 50% of money there. He is also heavy weighted with consumer services and commodities. George Soros owns 92 stocks with a total value of $3.2 billion. These are the details of the buys and sells.

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http://www.gurufocus.com/StockBuy.php?GuruName=George+Soros

Commodity trend funds need end to market volatility

sterday, 04:39 am
by Barani Krishnan (Reuters)

A steady economic rebound that sparks a big rally in commodities and stocks, or a deeper recession that pushes prices further down, is what trend-following commodity hedge funds need to reprise last year's heady run. Skip related content

These funds thrived through most of 2008, buying oil, metals, grains and equities as they rose and selling them as they plunged. They have not done well lately due to volatility in markets they trade in, including currencies and bonds.

But the so-called Commodity Trading Advisors, or CTAs, could have big gains again this year if global economic recovery strengthens and financial and raw materials markets start surging again.

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http://uk.news.yahoo.com/22/20090515/tbs-us-commodities-trends-analysis-9c49c44.html

Betting Against the Rally to Protect Your Portfolio

By BRETT ARENDS

This rally may have further to run. But investors might want to think about taking out some portfolio insurance -- just in case.

Luckily, the insurance, in the form of put options, is getting cheaper as optimism about the market grows. There are plenty of reasons for caution. Here are nine things the bulls should chew over.

1. Almost everyone on Wall Street is now bullish. Many sentiment indices are alarmingly complacent. The State Street Investor Confidence index is back to levels seen a year ago.

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http://online.wsj.com/article/SB124238842419923639.html

Shilling: Stocks Will Plunge 32 Percent

By Dan Weil

Economist extraordinaire Gary Shilling says that a sharp drop is in store for stocks, thanks to continued economic weakness.

“We think that you’ve got to approach things very cautiously,” he tells Yahoo! Finance.

With the recession running at least through next year, Shilling anticipates earnings of $40 for the S&P 500 Index.

“Normally at the bottom you have a 10 or 12 multiple on that,” he explains.

“With low interest rates, 15 is probably possible. That would put you at 600 on the S&P 500.”

Indeed, that’s Shilling’s target, which represents a 32 percent drop from current levels.

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http://moneynews.newsmax.com/streettalk/shilling_stock_plunge/2009/05/15/214869.html

Doug Kass: Vicious Correction Due

By Dan Weil

Doug Kass, president of money manager Seabreeze Partners, says that while the stock market won’t return to its March lows, a “vicious correction” is in store.

“It’s going to be bumpy and have a lot of potholes, so we’ll have to be cautious,” Kass told CNBC TV.

The long-short fund that he began Jan. 1 is now short for the first time.

“The good news is I believe that … the variant view that we’ve seen a generational low is intact,” he says.

The bad news: “I do think that stocks are ahead of fundamentals,” he says.

“I think the stock market recovery, I would call [it] the 'Miley Cyrus' recovery. It’s very popular now (however) there may be not so much talent underneath that’s reflected in prices. And perhaps it won’t be as enduring.”

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http://moneynews.newsmax.com/streettalk/kass_vicious_correction/2009/05/15/214858.html

Spain plans changes to renewable energy aid rules

(Reuters) - Spain plans to change rules on state aid for renewable energy generators, an industry ministry spokesman said on Friday, arousing fears in the sector that its lucrative subsidies may shrink.

Under a new regulatory framework that has not yet been finally decided, the government could also change its targets for installed wind capacity, which are now at 20 gigawatts by 2012, rising to 40 GW in 2020, the spokesman said.

"In theory, new targets would be set on an annual basis," he said.

At current growth rates, Spain could meet the 20 gigawatts target well before the scheduled 2012.

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http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSL899791820090508

China and the liquidity trap

by Paul Krugman

I liked this David Leonhardt article about the China-US economic relationship. But I do have a problem with this passage:

The most obviously worrisome part of the situation today is that the Chinese could decide that they no longer want to buy Treasury bonds. The U.S. government’s recent spending for bank bailouts and stimulus may be necessary to get the economy moving again, but it also raises the specter of eventual inflation, which would damage the value of Treasuries. If the Chinese are unnerved by this, they could instead use their cash to buy the bonds of other countries, which would cause interest rates here to jump, prolonging the recession.

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http://krugman.blogs.nytimes.com/2009/05/15/china-and-the-liquidity-trap/

Buffett’s Berkshire Boosted Wells Fargo Stake as Shares Fell

By Erik Holm

(Bloomberg) -- Billionaire investor Warren Buffett’s Berkshire Hathaway Inc. added to holdings of lenders Wells Fargo & Co and U.S. Bancorp in the first quarter as the shares traded at their lowest prices in more than a decade.

Buffett’s firm, the largest shareholder in San Francisco- based Wells Fargo, increased its stake in the bank by about 4.3 percent in the first quarter to 302.6 million shares, Berkshire said in a regulatory filing yesterday disclosing its U.S. stock portfolio as of March 31. Omaha, Nebraska-based Berkshire increased its holding of U.S. Bancorp by about 2.2 percent.

Banks that attract deposits at low rates were undervalued in the first quarter because investors wrongly believed that the entire industry was hobbled by risky bets and reckless lending, Buffett said at Berkshire’s annual meeting earlier this month. The KBW Bank Index fell 37 percent in the first quarter.

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http://www.bloomberg.com/apps/news?pid=20601103&sid=aT2xZNPDKkaM

The World's Biggest Debtor Nations

By Paul Toscano

In today's struggling global markets, many national economies have looked to their government and foreign lenders for financial support, which translates to increased spending, borrowing and in most cases, growing national debt.

Deficit spending, government debt and private sector borrowing are the norm in most western countries, but due in part to the global financial crisis, some nations and economies are in considerably worse debt positions than others.

External debt is a measure of a nation's foreign liabilities, capital plus interest that a country must eventually pay. This number not only includes government debt, but also debt owed by the private sector and individuals.

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http://www.cnbc.com/id/30308959/

Gary Shilling's Latest Thoughts

by Mark, TraderMark

Very few people forecast this mess in either magnitude or timing although many now claim they did. Even some of the most prominent "permabears" while correct on many of the outcomes, did not get the investing themes correct (i.e. Peter Schiff)... Gary Shilling is about as close to anyone I can find who not only got the economics right but also made a remarkable set of calls. For example many of us bears thought the dollar would be whipped into submission since in 99 out of 100 cases the country that spawns a world financial crisis does not have all the Earth's money flood into its currency - Shilling got that right, saying to go long the dollar and US bonds (really the only place to hide in 2nd half 2008 as ALL historic correlations broke down). While he was wrong on betting against commodities in 1st half 2008 he made it up in spades in the 2nd half.

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http://www.forexhound.com/article/Stocks/Stocks/Gary_Shillings_Latest_Thoughts/132672

Cutmore: Marc Faber on Armageddon

By Geoff Cutmore, CNBC Anchor

Prepare for War, the Death of capitalism and Bankruptcy of the US Government (not necessarily in that order)


A vintage performance from the author of "The Gloom, Boom & Doom Report". This morning – living up to his reputation for bearishness - Marc Faber forecast a litany of unpleasant events ahead.

His key message is: buy real assets. He thinks it will take years for the global economy to recover, but when it does the effect of governments' printing money will ultimately reignite inflation.

"If you're in any field, you should own a farm because one day you will be grateful that you are able to grow your own agricultural produce."

Recovery will be slow because government meddling in the markets will postpone it. He argues that the final low for markets and for growth will only come when the debt and losses have been cleaned out of the system.

Unless the system is cleaned out of losses, "the way communism collapsed, capitalism will collapse."

"The best way to deal with any economic problem is to let the market work it through."

The Fed is destabilizing, it's creating "enormous volatility".

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http://www.cnbc.com/id/30759753

Will capitalism fall like communism? Another Dr. Doom says yes

by Melly Alazraki

Before you go shoot your arrows at Nouriel Roubini, hold your horses. This is yet another Dr. Doom, Marc Faber, the author of "The Gloom, Boom & Doom Report." And before you decide he's anti capitalist or anything of the sort, hear him out.

Faber says that a sustainable recovery will occur only when the corporate system is cleansed of losses, and he hopes this happens by free market forces rather than government intervention. If this does not happen, and as it stands now he believes governments are trying to protect their poor investments and thus prevent this from happening, then he thinks capitalism risks collapsing "the way communism collapsed."

He spoke aon CNBC Europe's Squawk Box as part of a panel. The U.S. and its actions were a major part of the discussion, in which Charles Ortel, Managing Director of Newport Value Partners, said the U.S. is waging a war on capitalism. And he gave examples of the government is turning CEOs and companies against their fiduciary duty to shareholders. Ken Lewis being told to lie about the Merrill Lynch transaction was one.

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http://www.dailyfinance.com/2009/05/15/will-capitalism-collapse-like-communism-another-dr-doom-says-y/

The global downturn is not over yet, despite some green shoots

There is still a long way to go before the global downturn is behind us, despite signs that we may be emerging from the economic crisis

By Adrian Michaels and Edmund Conway

Suddenly everything is looking rosy. The UK stock market is up 25 per cent since March. The S&P 500 in the US is doing even better, up 30 per cent. House prices are no longer falling at breakneck pace; first-time buyers are finally returning to the market, snapping up cheap properties. Against all odds, businesses and consumers are starting to regain their appetite for spending.

And that's just in the UK. Looking abroad, places where housing foreclosures were at their worst in the US have seen a turn for the better. In Sacramento, California, and Fort Myers, Florida, sales volumes are up 45 per cent on last year. In Las Vegas, the figure is 35 per cent. Embattled and troubled the eurozone may be, but the number of new companies created in France in March had increased by 10.4 per cent – a record increase, despite the country being officially declared in recession yesterday. Even some luxury is back. A plush property development in Beijing sold out in 48 hours last weekend. The 138 properties cost between $750,000 and $2 million (£495,000-£1.3 million).

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http://www.telegraph.co.uk/finance/financetopics/recession/5330721/The-global-downturn-is-not-over-yet-despite-some-green-shoots.html

China Economic Scan Weekly Economic Review

By Callum Thomas, China Economic Scan

In the past week a number of key indicators of economic activity came out, painting a positive picture for economic growth in China, but CPI and PPI stats showed prices continued to fall. Among those data released were output, retail sales, food exports, and urban fixed-asset investment.

China's consumer price index (CPI), fell 1.5% year on year in April 2009, according to the National Bureau of Statistics (NBS). Food prices (comprising a 3rd of CPI) dropped 1.3%, dragged down by a 28.6% decline in pork prices as demand plummeted on pig flu fears. Non-food prices fell 1.5%. The index was down 0.2% since March, and the YTD fell 0.8% from the same period last year.

China's producer price index (PPI), a major measure of inflation at the wholesale level, also fell 6.6% in April year on year, according to the NBS. The decline compared with a 6.0% year on year drop in March and 4.6% in Q1 2009. Prices of production materials fell 8.1% in April year on year, the NBS said, and PPI for January-April fell 5.1% over the same period last year.

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http://www.forexhound.com/article/Fundamentals/Weekly_Reports/China_Economic_Scan_Weekly_Economic_Review/132577

Morgan Stanley forecasts 2009 China GDP growth of 7% to 8%

(China Knowledge) - Morgan Stanley raised its forecast for China's 2009 Gross Domestic Production (GDP) growth to between 7% and 8%, higher than the previous 5.5%, sources reported, citing Morgan Stanley Asia Chairman Stephen Roach as saying.

Roach also warned that China's economic growth would fall back to a level between 5.5% and 7% in 2010 due to the export slump caused by the global economic recession.

China will find it difficult to maintain a GDP of 8% next year as it depends on the external economic environment rather than the internal economic environment, said Roach, adding that China may experience a W-shaped recovery instead of a V-shaped recovery.

Roach suggested that China should expand domestic demand according to the 11th Five-Year Plan, double the size of the country's social security fund to US$160 billion and strengthen the pension reform.

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http://www.chinaknowledge.com/Newswires/News_Detail.aspx?type=1&NewsID=23604

Estados Unidos Os primeiros a sair da crise

Tudo começou nos EUA e tudo indica que seja aí que vai terminar. A crise financeira que se abateu sobre os mercados mundiais e mergulhou as economias numa recessão profunda deverá ser superada em primeiro lugar no...

Por Patrícia Abreu

Uma saída antecipada da crise deverá criar boas oportunidades de investimento nos EUA a médio prazo. Ainda assim, os gestores alertam: é preciso cautela.

Tudo começou nos EUA e tudo indica que seja aí que vai terminar. A crise financeira que se abateu sobre os mercados mundiais e mergulhou as economias numa recessão profunda deverá ser superada em primeiro lugar no país onde emergiu. Os gestores estão confiantes e acreditam que há boas oportunidades de investimento nas acções americanas a médio prazo. Mas, alertam, os riscos permanecem altos, o que exige cautela e selectividade.

Os fortes estímulos das autoridades no país e a estabilização de alguns indicadores económicos são os principais factores que sustentam o optimismo na região. Já do lado do risco, os gestores sublinham a saúde das instituições financeiras, o mercado imobiliário e o problema do desemprego. Ainda assim, realçam que as quedas recorde colocaram as acções a transaccionar a múltiplos historicamente baixos.

"Penso que é uma excelente altura para estar a investir nos EUA. O mercado accionista tem estado a construir uma base nos últimos meses, a partir da qual vai atingir novos máximos", adiantou ao Negócios John Carey, responsável pelo investimento nos EUA da Pioneer Investments. Já o Santander Gestão de Activos destaca que o investimento deve seguir uma lógica de médio e longo prazo, bem como uma estratégia de diversificação geográfica de exposição a acções.

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http://www.jornaldenegocios.pt/index.php?template=SHOWNEWS&id=367622

O que dizem os gestores de fundos

Cautela e selectividade são as palavras que dominam o discurso do Santander Gestão de Activos quando se fala do investimento em acções norte-americanas. Para a casa de investimento, qualquer decisão para...

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http://www.jornaldenegocios.pt/index.php?template=SHOWNEWS&id=367624

China’s Stock Bubble Passes Stiglitz Acid Test: William Pesek

Commentary by William Pesek

(Bloomberg) -- China’s stock-market boom is as clear a bubble as you will find, the conventional wisdom says.

When might it burst? Nobody knows if it will.

The Shanghai Composite Index has surged 45 percent this year. Just because China has deep pockets in this time of global crisis doesn’t mean its economic health supports this rally. Resources of China’s magnitude are a nice thing to have at the moment. And while probably too late to buy into the market, investors who are already there won’t be disappointed.

In a sense, buyers are betting on China’s socialist tendencies rather than its success in fostering free markets. Cash-rich China has simply built a better bubble. Rather than boding well for China’s long-term outlook, this rally serves as a reminder of risks facing the world’s third-biggest economy.

The strength of China’s fiscal position got a headline- grabbing endorsement this week from Nobel Prize-winning economist Joseph Stiglitz. At a May 13 forum in Beijing, Stiglitz said China “has taken very rapid action to address the crisis” and may emerge as “a winner.”

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http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=a6_rXxtBSsnk

Roubini vs. Zhou on the U.S. Dollar and the Chinese Yuan

By Andrew Batson

Originally posted on China Journal.

New York University economist Nouriel Roubini, in an op-ed piece Thursday, tackles one of the topics of the moment: the U.S. dollar’s status as the world’s undisputed reserve currency (the greenback is unique in that it is widely used outside U.S. borders as a currency for trade, and is the default currency for many of the world’s investors).

It’s interesting that Roubini – highly regarded these days because of his prescient warnings about the U.S. financial system– repeats many of the same arguments that China’s central bank governor, Zhou Xiaochuan, made in his proposal to end the dollar’s reserve status. But Roubini casts them in a somewhat different light.

“Having commodities priced in dollars has also meant that a fall in the dollar’s value doesn’t lead to a rise in the price of imports,” Roubini says. Yet the converse is also true, as Zhou pointed out in his essay: since the dollar is a reserve currency, it is harder for the U.S. to devalue its currency to support exports and help its economy recover.

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http://blogs.wsj.com/economics/2009/05/14/roubini-vs-zhou-on-the-us-dollar-and-the-chinese-yuan/

Global Agenda: More housing blues

By PINCHAS LANDAU

The original source of the global economic crisis was the housing bust in the US. It is now over three years since this began, since most of the key parameters of the residential housing sector peaked between late 2005 and the second quarter of 2006. The effects of that reversal began to be felt in the financial markets in early 2007 and with full force from July of that year. The rest, as they say, is history - although it is worth remembering that as late as early 2008, there were still many people who were convinced, and tried to convince others, that the "subprime crisis" was a problem limited to some borrowers, in some areas, and only in the US.

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http://www.jpost.com/servlet/Satellite?cid=1242212380295&pagename=JPost%2FJPArticle%2FShowFull

Buffett cuts stake in Constellation Energy

by Ryan Sharrow Staff
Baltimore Business Journal

Billionaire investor Warren E. Buffett has trimmed his stake in Constellation Energy Group Inc., according to a filing with the Securities and Exchange Commission Thursday.

The filing shows that Buffett’s Iowa-based MidAmerican Energy Holdings Co. owns a 6.26 percent of the Baltimore energy giant. That’s down from a 7.25 percent stake listed in a February filing.

It’s not the first time in the past several months Buffett cut his stake.

MidAmerican, a subsidiary of Buffett’s Berkshire Hathaway (NYSE: BRK.A, BRK.B), acquired a 10 percent stake in Constellation in December following Constellation’s move to terminate MidAmerican’s $4.7 billion deal to buy the company.

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http://www.bizjournals.com/baltimore/stories/2009/05/11/daily41.html?ana=from_rss

Advice from the oracle

By MARSHA MERCER
Media General News Service

WASHINGTON, D.C. — Billionaire investor Warren Buffett had some sage advice for Washington the other day.

During a three-hour talk fest Monday on CNBC, the world’s second-richest man said he’d never seen the American public more fearful or confused about the economy. For that to change, he said, the government needs to do a much better job explaining what it’s doing to fix the problem.

“We’ve had muddled messages,“ Buffett said. The public does not know “what’s going on, and their reaction then is to absolutely pull back.“

Foes of the president rejoiced in an I-told-you-so moment. Muddled messages! Yes!

Republicans gleefully circulated the Buffett quote as confirmation from the second wealthiest man on the planet — a big Obama supporter — that the new president isn’t getting the job done.

They say Obama’s decision to push ahead with health care and education reforms indicates he isn’t paying enough attention to the economy. They blamed this scattershot approach for the muddled message.

Not so fast. Obama does not deserve all the blame, even if he did sign into law thousands of special spending “earmarks” after vowing to reform the way Washington works.

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http://www.staffordcountysun.com/scs/news/local/article/advice_from_the_oracle/35662/

Krugman: short-term economy looks good

One of the world's leading economists Paul Krugman says he is modestly optimistic about the short-term economic recovery. He was speaking Thursday at a symposium in Taipei.

Krugman also revised his earlier prediction of the chance of experiencing another Great Depression from 20% down to just 5%.

The 2008 Nobel Prize winner in economics said, though, that he is not so sure about the future.

"Just again to emphasize -- we are not out of the woods yet. In a way, the world heaved a sigh of relief as the economic numbers began coming in a little bit less bad. The extraordinary speed with which people were prepared to declare that emergency's over. Because various indices of rate of change are showing that …the rate of change in the negative direction is not as great as it was . It has been a bit alarming. We've passed the point where a wholesale collapse seemed like the most likely outcome. That's not going to happen. But now complacency is a great danger."

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http://english.rti.org.tw/Content/GetSingleNews.aspx?ContentID=78915

U.S.A. faces turbulent financial future with dire political consequences

by: Michael Lynch

Implications

Nouriel Roubini, professor of economics at New York University, reported on May 14 in the New York Times that the Chinese renmimbi could replace the U.S. dollar as a reserve currency. In the 19th Century, the British Empire was dominant and the pound sterling was the world’s reserve currency. But the United Kingdom became a debtor nation during the second World War and the U.S.A. became dominant. The dollar took over as the reserve currency. Professor Roubini suggests that we are now entering the Asian Century with a dominant China and its currency. The dollar will not quickly vanish but it is challenged by the renmimbi. For America, financing budget and trade deficits cheaply would vanish. In the past, empires that held the reserve currency were creditors, not debtors. Today the U.S. has fallen into the category of a debtor nation, relying on foreign creditors who have become uneasy. The downfall of the dollar is a matter of time unless U.S. financial policy is changed.

Analysis

Sitting side by side in my office bookshelf are: The German Inflation of 1923 edited by Fritz K. Ringer and Fiat Money Inflation in France by Andrew Dickson White. Looking inside the covers, I see that I acquired both of them in 1975.

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http://www.glgroup.com/News/U.S.A.-faces-turbulent-financial-future-with-dire-political-consequences-39051.html

Shifts in the Wind Industry Uncover Opportunities

By Daniel Holland| 05-13-09| 06:00 AM

The emergence of wind as a potential fuel source has created an array of ways for investors to participate in the industry. While wind energy is still far from being economic, government intervention has helped it to compete against more-conventional sources of power.
The battle lines are beginning to form in the United States, with major turbine manufacturers turning their attention to the wide open space in the Midwest known as the wind corridor. As industry leader Vestas is shutting down European plants and laying off workers, it is building plants in the U.S. to compete directly with General Electric (GE), which holds a dominant position on its home turf.
Siemens (SI)has also announced plans to build a factory in Kansas in order to locate itself where growth appears to be the most promising. This repositioning of manufacturing of assets is heavily based on reducing the cost of getting the turbine parts to the wind farm location as transportation costs are a major component of the installed cost.

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http://news.morningstar.com/articlenet/article.aspx?id=291318

How Low Can Global Economies Go?

Dubai Holding has released the conclusions to a report about the global business outlook that it commissioned from the Economist Intelligence Unit based on a survey of 418 senior global executives.
It concludes ‘capitalism is entering a new era of lower risk tolerance, higher regulation and slower growth’. In other words, the debt-driven investment boom is over, government interference in business will grow and economies will not recover quickly from the recent slump in global trade.

Reaching a bottom

However, there is a tacit assumption here that the decline in economic activity has fallen to a market bottom. But do we really have any reason to make this assumption, apart from wishing it to happen? Just how low will economies go before the bounce back starts?

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http://seekingalpha.com/article/137401-how-low-can-global-economies-go

Stiglitz Says China May Emerge a Winner From Crisis

By Eugene Tang

(Bloomberg) -- China may emerge as “a winner” from the global financial crisis because of its high savings rate and strong policy response, Nobel Prize-winning economist Joseph Stiglitz said.
“China’s government has taken very rapid action to address the crisis,” Stiglitz said at a forum in Beijing today. High savings rates may help Asian economies “weather the financial crisis,” he said.
The Shanghai Composite Index has climbed 46 percent this year on optimism that surging lending and a 4 trillion yuan ($586 billion) stimulus package will drive a rebound in the world’s third-biggest economy. Weaker industrial-output growth in April, reported today, highlighted the central bank’s view that the recovery is not yet solid.

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http://www.bloomberg.com/apps/news?pid=20601080&sid=aSy6OpCm_ST4&refer=asia

Buyers beware: Should you be tempted by the share price rally?

By Rosanna Spero

Confidence seems to have returned to the stock market, with the FTSE 100 up almost 1,000 points from its March low of 3,512.
Two prominent investment gurus, Fidelity's Anthony Bolton and Odey Asset Management's Crispin Odey, claim we have moved into a bull market - where prices rise over a prolonged period of time.
But are they right and should private investors be committing money to the stock market? While some believe this is the start of a long bull run, others think it is a fool's rally in a bear market and prices could fall again sharply.

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http://www.dailymail.co.uk/money/article-1180921/Buyers-beware-Should-tempted-share-price-rally.html

Macro Hedge Funds Buy Commodities, Sell Treasurys

NEW YORK (Dow Jones)--Retail investors, worried about inflation, have turned to commodities as a hedge. For some hedge funds, the strategy comes with an extra layer.
A number of hedge funds pursuing a strategy known as "global macro" have taken to buying commodities and going short Treasury bonds at the same time.
Hedge fund advisory firm Hennessee Group LLC tracks 20 macro firms with assets totaling about $80 billion. About three quarters of them are making the commodity-Treasurys trade, said Charles Gradante, Hennessee's co-founder.
The idea is that with benchmark U.S. interest rates near zero and the Federal Reserve essentially...

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http://online.wsj.com/article/BT-CO-20090511-718057.html

Worst of the recession may be over for Britain, says OECD

by Gráinne Gilmore, Economics Correspondent

Hopes are mounting that the worst of the recession is over for Britain, after influential organisations and investors said that there were clear signs of economic recovery.
The Organisation for Economic Co-operation and Development said yesterday there were indications that the country was experiencing a “pause in the economic slowdown”.
The multibillionaire investor George Soros echoed the positive forecast, saying that a meltdown of the world’s financial system had been averted. Jean-Claude Trichet, the President of the European Central Bank, said that some countries had already moved beyond the worst of their recessions.

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http://www.timesonline.co.uk/tol/news/uk/article6269927.ece

Stock-Market Fears Are Subsiding

By STEVEN M. SEARS

Stress-test results lead to trading opportunities amid a growing comfort for owning stocks.

ON MONDAY, OPTIONS traders seem to be mulling the investment implications of the Federal Reserve's much-ballyhooed stress test of banks and other financial institutions.
Many traders are debating if last week's strength in the financial-stock sector following the release of the Federal Reserve's stress test is the start of a meaningful advance or a one-time pop caused by swirling market forces, including the collision of short-sellers, preferred stock strategies, and retail investors attracted by inexpensive stock prices.

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http://online.barrons.com/article/SB124205444178106975.html

Trust In Jim Rogers (RJA, RJZ, RJN, RJI, GSG,)

By Aaron Levitt

Just as Bill Gross is seen as the "Bond King," Jim Rogers is looked upon by the commodity community as the hard asset guru. As one half of the famous Quantum Fund, along with George Soros, Rogers made a name and a fortune for himself. Helping to popularize physical goods investing for the average Joe, his words, like Warren Buffett's, are usually taken to heart. So when he speaks, people listen.

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http://community.investopedia.com/news/IA/2009/I-like-Jim-Rogers-But-Im-Just-Not-Buying-His-Funds-RJA-RJZ-RJN-RJI-GSG-DBC0511.aspx

How to Value Stocks? Ignore Economic News

By BRETT ARENDS

Investors trade on the belief that share values are closely related to the economy. They shouldn't.

The stock market jumped 6% last week on growing hopes of an imminent economic recovery. It has risen 39% from the March lows on similar hopes. Of course, it had previously fallen nearly 60% on fears of a slump.
All these moves have one thing in common: Millions of investors have acted on the belief that share values are closely related to what will happen in the economy in the next few months and years. But are they right?
Not according to Ben Inker, director of asset allocation at contrarian fund company Grantham Mayo Van Otterloo & Co. In a recent and fascinating note ("Valuing Equities in an Economic Crisis, or How I Learned to Stop Worrying about the Economy and Love the Stock Market"), Mr. Inker persuasively argues that the next moves in the economy shouldn't actually matter too much to investors at all.

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http://online.wsj.com/article/SB124204099547806403.html

4 Reasons Why Commodity ETFs Are Gaining Assets

While a global economic crisis diverted interest away from the commodity markets and related ETFs, new signs are emerging that investors are on the hunt for more adventurous trading strategies when it comes to the sector.
The upswing that was expected within the commodity sector has been tempered in recent months; however, the interest is still ripe for investment, and strategy has simply shifted. According to Sue Thomas for Reuters on The Guardian, the proof of investor interest is in the flows of new money into commodities in the first quarter, which had been estimated at record levels. What’s going on?

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http://seekingalpha.com/article/136794-4-reasons-why-commodity-etfs-are-gaining-assets

Commentary: Is stock rally for real?

By Simon Johnson and Peter Boone
Special to CNN

(CNN) -- Euphoria returns! Who could have guessed that Bank of America stock would rally 70 percent the week it learns the Feds are demanding new capital equal to nearly half the bank's market capitalization?

The ongoing grim news -- on rising unemployment, continued (albeit slower) economic decline, and ordinary working Americans being hammered on all sides -- is being ignored by stock and commodity markets. Is America now back on track for growth?

The answer to that is almost surely no. Rising stock markets don't necessarily mean a sharp recovery is under way. Consider the case of Japan in its first lost decade of the 1990s.

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http://www.cnn.com/2009/POLITICS/05/08/johnson.economy/

Top fund manager sees shift from recession to recovery

By Mark Shepherd

Fidelity’s Bolton sees first signs of possible turnaround at Ross Goobey memorial lecture
One of Europe’s top fund managers this week hailed the first signs of a recovery in the UK economy.
Anthony Bolton, president for investments at Fidelity International, one of the world’s largest fund managers, said: ‘We are seeing the first signs that things are becoming less bad with the Green shoots, I believe, coming through.’

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http://www.propertyweek.com/story.asp?sectioncode=36&storycode=3140044&c=1

Cynthia McKinney’s conspiracy theories strike again

It appears Cynthia McKinney will take her anti-Semitic conspiracy theories wherever she can find them. Blogger Adam Holland notes that the one-time Democratic member of Congress from Georgia and 2008 Green Party nominee for president -- whose father blamed her congressional defeat in 2002 on the "J-E-W-S" is now promoting the far-right theories of Matthias Chang that a group of "Shadow Money-Lenders" is trying to destabilize the world economy and install a "one-world government":

McKinney's column (read here) which accuses George Soros and Alan Greenspan of participating in a plot to deliberately destabilize the world economy in order to install a "one-world government", uses Chang's term for this purported conspiracy: "the Shadow Money-Lenders" (not coincidentally, the title of Chang's most recent book). Typical of such conspiracy theories, Chang and McKinney connect this to an ancient plot which took shape under the hidden hand of the Rothschilds. McKinney puts a somewhat confused post-colonial third-world spin on this by citing Haiti as an example of what she says is planned for the rest of the world, the apparent link being that she happens to be in Haiti at the moment. Her leftist, "shock doctrine" approach also serves to make the essentially fascist contents of her column more palatable.

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http://blogs.jta.org/politics/article/2009/05/08/1005033/cynthia-mckinneys-conspiracy-theories-strike-again

This Week's 5 Dumbest Stock Moves

By Rick Aristotle Munarriz

Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As I do every week, let's take a look at five dumb financial events this week that may make your head spin.

1. This car is going to get totaled
General Motors (NYSE: GM) announced plans for a 1-for-100 reverse split, as it embarks on its recapitalization plan. The automaker has 610 million shares outstanding, but expects to have a whopping 62 billion shares after it prints new shares to pay off creditors, the government, and the auto workers union.

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http://www.fool.com/investing/high-growth/2009/05/08/this-weeks-5-dumbest-stock-moves.aspx

"¿Sabes por qué la bolsa sube?" Glup

La pregunta me la hicieron ayer tres personas distintas. Curiosamente, la misma pregunta he estado realizando yo a los que de verdad saben de bolsa. Mi respuesta inicial es siempre la misma: "ni idea." Y cuando pregunto a los supuestos entendederos, de buenas a primeras no responden. Sonríen y se callan unos segundos antes de empezar a racionalizar y predecir el futuro. Como últimamente -y no hay que dar las razones- hemos salido todos muy escamados de predicciones, mejor que nos tomemos esta racionalización con muchas pizcas de escepticismo.

Esta es una tesis, que puede tener variantes diversas.

Los mercados han tenido una corrección al alza dentro de una tendencia bajista a largo plazo. Un veranillo trimestral producido por las decisiones tomadas por el gobierno americano para arreglar la gran chapuza financiera. Algunas cifras económicas auguran la recuperación de cierta confianza del consumidor y que el mercado inmobiliario ha podido tocar suelo en algunos mercados. Como la Bolsa vive de las expectativas, espera que Estados Unidos salga de la recesión antes de lo esperado (¿comienzos año próximo?), los inversores necesitados de alegría y de recuperar pérdidas pasadas, se han apuntado a una racha optimista. ¿Hasta cuándo? Hasta que hayan recuperado parte de las pérdidas del último año y medio. Después, a esperar. Entramos en un periodo de montaña rusa de entradas y salidas continuadas de dinero, apto para los que no sufren del corazón.

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http://blogs.expansion.com/blogs/web/saballs.html?opcion=1&codPost=52653

Investors bet that worst of recession is over and predict new bull market

From The Times
Gary Duncan, Helen Power, Christine Buckley and Peter Jones

A wave of euphoria swept world stock markets yesterday as investors piled back into shares, betting that the worst of the global recession had passed.
Rising spirits among investors sparked a powerful rally in shares on both sides of the Atlantic. Leading experts predicted that it marked the beginning of a bull market, with share values back on course for sustained gains over coming months, and perhaps several years.
The burst of optimism came as a more bullish mood took firm hold. It was encouraged by a series of upbeat indications that the world recession may have bottomed out.
In London, and in stock markets across the developed world, shares have erased all of the losses inflicted by the economic slump since the start of the year.

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http://business.timesonline.co.uk/tol/business/markets/article6251885.ece

Charlie Munger's Thoughts on Just About Everything

By Morgan Housel

Those who have attended the Berkshire Hathaway (NYSE: BRK-A) shareholder meeting know Charlie Munger as a man who chimes in with "I have nothing to add" to at least three-quarters of questions asked to his longtime business partner, Warren Buffett.
The Wesco Financial -- where Munger is chairman -- shareholder meeting is a completely different story. Free from the overwhelming spotlight cast on Buffett, Munger spends a few hours every year sharing his thoughts and opinions on, well, just about everything.
Below is a summary of my notes from Munger's three-hour meeting in Pasadena, lightly edited for clarity.

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http://www.fool.com/investing/value/2009/05/08/charlie-mungers-thoughts-on-just-about-everything.aspx

Warren Buffett's Three Lessons in a Down Economy

By Adam Pash

Multi-billionaire and finance guru Warren Buffett knows a thing or two about making good investments, and weblog Get Rich Slowly offers three lessons from Berkshire Hathaway's annual meeting.

The lessons aren't mind-blowing advice for doubling your portfolio in a down economy, but that's never really been Buffett's style. Instead, they're a nice reminder that we're all in the same boat and that anyone can successfully invest if they stick to what they know (something we've heard before). The bullet-point version:

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http://lifehacker.com/5245913/warren-buffetts-three-lessons-in-a-down-economy

What Will the Recovery Look Like?

Time magazine takes a look at what we might expect in the coming economic recovery, with insight from top strategists such as Peter Lynch and Jean-Marie Eveillard. A sampling of the advice:

* Lynch says that waiting for a major economic recovery to occur before jumping back into the market can cost you a lot. “People think that things need to go from terrible to terrific before they can invest,” the former Fidelity star says. “But things only have to get to somewhat crummy for stocks to go up.”

* Eveillard, of First Eagle Funds, says not to expect this recovery to be like those we’ve usually seen in the past 60 or so years. “It’s a very different story today,” he says. “The landscape is different, and the recovery, when it comes, probably won’t be along the lines of what we have seen in the post-World War II period.”

* Robert Arnott of Research Affiliates thinks corporate bonds — not stocks — are the place to be in this recovery. They’re yielding about 6% compared to the S&P 500 yield of about 3.1%, Time notes.

in:
http://theguruinvestor.com/2009/05/08/what-will-the-recovery-look-like/

Understanding Warren Buffett's bear market maneuvers

By Dan Barufaldi

In times of economic decline, many investors ask themselves, "What strategies does the Oracle of Omaha employ to keep Berkshire Hathaway on target?" The answer is that the esteemed Warren Buffett, the most successful known investor of all time, rarely changes his long-term value investment strategy and regards down markets as an opportunity to buy good companies at reasonable prices. In this article, we will cover the Buffett investment philosophy and stock-selection criteria with specific emphasis on their application in a down market and a slowing economy. (For more on Warren Buffett and his current holdings, sign up for our Coattail Investor newsletter.)

in:
http://www.kivitv.com/Global/story.asp?S=10323677

10 reasons to be cheerful about the economy

Times remain tough but light is starting to pierce the gloom, write Angela Monaghan and Edmund Conway.

The weaker pound

The devaluation of the pound could help to drag Britain out of recession by increasing the country's competitiveness. It makes UK exports more attractive to foreign buyers because they are cheaper, and therefore helps to drive increased production in Britain's factories, which in turn requires more work and higher employment levels. To have any meaningful impact on UK gross domestic product, demand from its key export markets will have to rise significantly from current levels. The US is among them, so evidence that the recession there is bottoming out is good news for the UK.

in:
http://www.telegraph.co.uk/finance/financetopics/finance-predictions-2009/5297492/10-reasons-to-be-cheerful-about-the-economy.html

Can we make money in recession?

Now it is official that this recession will be long and painful. The stress tests are out and Obama Administration does not show the nerve to make bold moves like taking over most troubled banks. (read Paul Krugman’s article here: http://www.nytimes.com/2009/05/08/opinion/08krugman.html?_r=1) That means our pain will be very long. We have to live with the recession or very long jobless recovery will be there for many years.
The basic question we individuals will still need to answer is can we still make money in recession? Because ultimately we really not care much about the overall economy. What we really care about is are we able to make enough money for our stomach and for the rest of the family. First we need to take care of us and then the rest of the society.
The good news is yes we can make money in recession and we can do it in stock markets.

in:
http://caps.fool.com/blogs/viewpost.aspx?bpid=191958&t=01000382431830678788

Berkshire reports quarterly net loss of $1.53 billion

by Alistair Barr, MarketWatch

SAN FRANCISCO (MarketWatch) -- Berkshire Hathaway reported a quarterly net loss late Friday as the insurance-focused conglomerate run by Warren Buffett recorded losses on some of its investments and derivatives positions.
The company reported a first-quarter net loss of $1.534 billion, or $990 per class A equivalent share. That compares to net income of $940 million, or $607 per class A equivalent share, in the same period a year earlier. The net results are attributable to Berkshire shareholders.
The latest result includes investment and derivatives losses of $2,090 per class A equivalent share.

in:
http://www.marketwatch.com/news/story/berkshire-reports-quarterly-net-loss/story.aspx?guid={2EB89FCA-82CB-4DF2-8AAF-D3102CD649A5}&dist=msr_2

Unchecked deflation could thwart recovery

By Dean Calbreath Union-Tribune Staff Writer

Over the past couple of weeks, there have been growing signs that the economy may be turning the corner. Although things aren't necessarily getting better, they at least appear to be slowing their descent.
The latest piece of good news came yesterday, when for the first time in five months, new filings for unemployment dropped below the 600,000 mark. Recent data have also shown that the decline in home prices has slowed locally and nationally, businesses are selling off their inventories, and shoppers are returning to stores.
“The light at the end of the tunnel is no longer a faint speck of light, but a glowing orb of sunshine,” said Wells Fargo economist Scott Anderson.
However, economists say two major threats still loom: deflation while the recession lingers and inflation once the recovery begins. Even if the economy manages to rise from its current morass, it could be brought down again if prices continue to fall – or if they bounce back too sharply.
To some economists, the chief threat is deflation, a decline in prices and incomes that could pull the rest of the economy into a downward spiral.

in:
http://www3.signonsandiego.com/stories/2009/may/09/1n9deflate015649-unchecked-deflation-could-thwart-/