Financial Statistics
Thursday, March 19th, 2009
With all the recent Fed actions, is there any one who here believes that inflation will not go out of hand in the near future? While I don’t think that we will see double digit interest rates, I do expect rates to trend higher (8-9%) within a few years.
I recently came across this blog post that shows a historical chart of the Fed Funds Effective Rate between 1954 and 2008. Paul Volcker, the Fed President at that time had to raise interest rate all the way to 20% to fight off inflation. But that drove the economy into a deep recession.
I recommend reading The Bear Facts for a look back at the early 80’s.
As an investor you would naturally ask how do we tackle inflation? What is the best way to invest in the inflationary environment?
This article posted on Global Economic Trend blog gives some ideas
# In hyperinflation the last place one wants to be is in cash.
# Commodities in general are a standout.
# Gold is a standout.
# Precious metals are a standout.
# Property is a winner.
# Equities are a winner.
# Treasuries are distinct losers if not an outright short.
# Foreign currencies
# Energy
I recommend investors to consider the following stock investments
1) Vanguard Precious Metals and Mining (VGPMX)
It’s down 66% from peak. I think this is a great safe way to play precious metals. The fund recently added Newmont Mining (NYSE:NEM).
2) Double Gold Long (DGP)
DGP has been performing well recently since Fed’s announcement of backing Mortgage treasury bonds.
Also while you are there, take a look at this article.
Gold railles to near $960 an ounce on Fed’s announcement.
3) U.S Oil Fund (USO)
As Oil continues to perform well, USO is a great fund to be in. Fed’s recent action not only helped Gold, but also Oil and other commodities.
Filed under: Economy, Economy Statistics, Financial Statistics, Trading Strategy, Energy, Financial Press, Finance | | 1 Comment »
Friday, February 20th, 2009
It’s been a while since I posted anything in my blog.
Here is a question for you. Which one gets bailed-out and/or nationalized by govt this weekend? Bank of America or Citibank?
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20090219&id=9625851
Except for Chase, Goldman Sachs and Wells Fargo, I have no confidence in the survival of most of the U.S financial institutions.
I made a short-term buy recommendation back in late Nov when Dow was at this level. In early January markets peaked. After Obama’s inaguration, market started tanking. This administration is making the same mistakes what the previous administration did. Handouts to the people who are foreclosing the properties because they couldn’t afford to buy the properties in the first place. Come no..now! You cannot artifically set the floor on housing prices. What goes up needs to come down. Housing prices are totally out of whack with income. We have at least 20% more downside at the national level. NYC market has just started cracking. Toll brothers condos in Brooklyn and Queens are on fire sale (if anyone is interested in living in the burroughs). Markets have no confidence in Geithner (wrong choice for Treasury Secy). We are most probably going to see new multi-year lows on all major indices. If Dow breaks 7440 tomorrow and S&P breaks 740, short the heck out of Financials and Tech. Unemployment is more like 10%. Our govt data is reporting 6% which is not correct. I think most retailers will not exist after this year (Nordstrom, JC Penny, Sears, Tiffany, Sakhs all in trouble). GM and Chrysler will go bankrupt in a few months and might be forced to merge their operations.
Good luck and play safe!
Filed under: Economy, Financial Markets, Financial Statistics, Trading Strategy, Finance, Financial Bailouts | | No Comments »
Monday, September 29th, 2008
$700 Billion Rejection = 777 points down in DOW
The picture says it all..
Some of the headlines that are rocking the Wall street today
On the lighter side
Filed under: Economy, Financial Markets, Financial Statistics, Financial Press, Finance, Financial Bailouts | | No Comments »
Wednesday, September 10th, 2008
NEW YORK (Reuters) - Lehman Brothers Holdings Inc (NYSE:LEH - News) said it plans to sell a majority stake in its investment management division and spin off commercial real estate assets as the struggling U.S. investment bank fights to raise capital.
S&P 500 and Dow Jones industrial stock index futures dropped on Wednesday as uncertainty about the outlook for Lehman Brothers (NYSE:LEH - News) flared anew after the U.S. investment bank posted quarterly results.
More to come soon
Filed under: Financial Markets, Financial Statistics | | No Comments »
Sunday, July 13th, 2008
U.S moves to rescue Fannie and Fannie
WASHINGTON (Reuters) - The U.S. Treasury Department and Federal Reserve on Sunday announced sweeping measures to lend money and buy stocks if necessary in embattled mortgage lenders Fannie Mae and Freddie Mac.
http://www.reuters.com/article/newsOne/idUSN1332789320080713
First Bear, next IndyMac and now Freddie and Fannie.
65 billion is light guesstimate of fannie and freddie next 3 year losses.
Watch USD imploding tomorrow. Short term botton is in. I expect market (especially Financials) to rally tomorrow mostly because of shorts covering.
http://www.marketwatch.com/news/story/white-house-fed-step-rescue/story.aspx?guid=%7BF942EDC2%2DE975%2D4F01%2DAF6F%2DF1D7591E4526%7D
Filed under: Economy, Financial Markets, Financial Statistics, Housing | | No Comments »
Monday, June 23rd, 2008
More bad news in the Financial Sector.
Goldman and Citigroup announced major job cuts. XLF made a new 52 week low today (21.53) at 10:30 a.m EST.
Moody downgraded the credit ratings of Ambac Financial (ABK) and MBIA (MBI) citing their limited ability to raise new capital and write new business. Analysts cut their price targets for, among others, Goldman Sachs (GS), Citigroup (C) and Wachovia (WB).
Filed under: Financial Markets, Financial Statistics | | No Comments »
Sunday, March 30th, 2008
Not surprised to see a huge jump in the volatility in the U.S and other markets around the world. Is the high volatility at this level indicates the bottom for the markets?
Filed under: Financial Markets, Financial Statistics | | No Comments »
Wednesday, March 26th, 2008
Here is an interesting chart from Wall Street Journal. In this article (linke provided below), WSJ notes that the stock market is trading at levels where it was nine years ago. For example, if you invested $10,000 in the S&P index back in 2000, it will be about the same value today.
Check out the article Lost Decades on WSJ.
Filed under: Financial Markets, Financial Statistics | | No Comments »
Thursday, March 13th, 2008
NEW YORK (Reuters) - U.S. gold futures rallied to a record high of $1,000 an ounce on Thursday, fueled by a combination of a weakening dollar, strong investment demand and inflation fears due to rising crude oil prices.
Fears of a recession and expectations of aggressive rate cuts from the U.S. Federal Reserve to help shield the U.S. economy is piling pressure on dollar, while also boosting gold and oil as alternative investments.
U.S. crude oil futures climbed to a record high of $110.70 a barrel as the weak dollar offset news of an increase in U.S. crude inventories.
TRACKING GOLD’S CLIMB
Below is a timetable for spot-contract-month settlement prices as gold ran up through each “big number” — $300, $400, $500, and on — over the years.
• $253 — low settlement price on Aug. 25, 1999
• $308 — hit 22 trading days later on Sept. 28, 1999
• $402.70 — hit 1,038 trading days later on Dec. 1, 2003
• $502.50 — hit 500 trading days later on Dec. 1, 2005
• $615.40 — hit 91 trading days later on April 17, 2006
• $703.70 — hit 16 trading days later on May 10, 2006
• $805.70 — hit 371 trading days later on Nov. 2, 2007
• $901.60 — hit 47 trading days later on Jan. 14, 2008
• $1,000 — hit in most-active futures for first time ever today
Source: WSJ Market Data Group
Filed under: Economy, Financial Markets, Financial Statistics | | No Comments »
Thursday, March 13th, 2008
Adjusted for inflation, gasoline at $3.227 a gallon, according to AAA, is still about 18 cents below its peak of $3.405, set in March 1981, according to the Energy Information Administration.
But prices are higher then they have been at any time in recent memory. In 2002, when many people may have bought a vehicle they are still driving today, Americans spent just 4% of their income on energy. Gas prices, adjusted into 2008 dollars, were at a near all-time low of around $1.30 a gallon.
Filed under: Economy, Financial Markets, Economy Statistics, Financial Statistics | | No Comments »
![Freakonomics[Revised and Expanded]](/images/21xRHBWYYML.jpg "Freakonomics[Revised and Expanded]")
