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HomeDr. Edwin Vieira’s Amazing Crystal Ball, 2006
Posted by Larry Doyle on March 24th, 2009 9:52 PM |
I will admit that I am not a student of the Great Depression, but I have started reviewing that period. Obviously I, like every American, hope our economy stabilizes and we regain our footing and return to prosperity. While the pragmatic optimist in me believes that can happen, the trader and risk manager in me tells me to review the Depression, understand the dynamics, assess the risks of our current period, and prepare accordingly.
I hope and believe people who have been reading my work for a while appreciate that I am not an alarmist. Whether working on Wall Street as a trader and salesman or now writing for Sense on Cents, a measured, analytical approach has always generated the best results. In that vein, I discount speculators and salesmen who attempt to make a buck from heightened levels of anxiety. That said, the elevated levels of risk in our economy, markets, and global finance require an equally elevated sense of risk analysis and historical analysis.
Given some of the economic saber rattling emanating from China and the lessened fiscal support emanating from Europe, the threats of global protectionism are clearly growing. That scenario also occurred during the Depression. (more…)
China Ups the Ante
Posted by Larry Doyle on March 23rd, 2009 11:12 PM |
In ten days, the leaders of the G-20 will meet for the most highly anticipated financial conference since Bretton Woods in 1944. In a bold and aggressive move prior to this conference, China’s central bank called today for the replacement of the U.S. dollar as the international reserve currency.
I have written about the tension in U.S.-Chinese relations over the last few months. The essence of this tension is captured in the Prisoner’s Dilemma and A Question of Honor.
Make no mistake: the timing, tone, and substance of this message so close to the start of the G-20 is another major shot across our bow. The ramifications for a change in this international reserve currency are enormous, both politically and economically. Check out current, worthwhile discussions on this topic collected from a variety of sources at Memeorandum.com. In addition, I recommend reading the following article from the Financial Times:
China calls for new reserve currency
By Jamil Anderlini in Beijing
Published: March 23 2009 12:16 | Last updated: March 24 2009 00:06China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund. (more…)
Midday Market Update . . . U-G-L-Y
Posted by Larry Doyle on March 5th, 2009 12:45 PM |
I had written that yesterday’s 2-3% upward move in the market was very likely a Dead Cat Bounce. Well, that cat is burrowing further into the ground as markets have more than fully retraced yesterday’s upward move and are making new lows. This type of price action, known as lower highs and lower lows, confirms bearish trends.
I hope our readers know that all financial information you could possibly want is on the Market Data tab on the Sense on Cents header. That resource provided by the Wall Street Journal is not only a great way to get a quick and comprehensive snapshot of all sectors of the market, but also a great way to keep your brokers and financial planners on their toes and working for you!!
Let’s take a quick look at the markets and then I will offer some commentary. (more…)
Overnight Trade
Posted by Larry Doyle on March 4th, 2009 6:31 AM |
Stocks in Asia rose on the heels of a report that China’s Wen May Announce New Stimulus Measures to Revive Growth
With China allocating this capital to a new stimulus, will that lead to lessened appetite for U.S. Treasury debt? In overnight trading, Treasuries Drop on Potential $60 Billion Note Sale Next Week.
In other market making news, the shine has come off gold somewhat. I had cautioned that I do not play in gold because of the large number of speculative traders. Gold dropped 3% overnight and is back to $910/oz.
The U.S. dollar continues to move higher versus the Japanese yen and is back close to par, 100 yen for $1 dollar.
I remain in the camp that the bond market will continue to be pressured by the global demand for capital.
One story that also bears watching is the “plundering” of Merrill Lynch. In breaking news the WSJ reports how Merrill Lynch paid a large number of individuals outrageous sums at the end of 2008. Merrill’s $10 Million Men highlights the details. If I am John Thain, I’m not sleeping well!!
LD
Wie Geht’s?
Posted by Larry Doyle on February 26th, 2009 4:30 PM |
I have always been intrigued by Germany. From the history of the republic, to the wars, the division and reunification, Berlin, Munich, the food, the beer — there is a lot going on there. I had the good fortune of spending a college semester in Freiburg, which is in the southwestern corner of the country. “Wie geht’s,” meaning “how are you,” evokes many pleasant memories. The education both inside the classroom and out was fabulous.
There is little doubt that Germany carries the most weight within the European Union. Germany suffered massive inflation after the Weimar Republic and the fear of hyperinflation is deeply embedded in their culture. Given my experience and interest, I watch developments there fairly closely. (more…)
