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Timing & trends

All The Old World Systems Are Being Deliberately Torn Down


Posted by ZeroHedge

on Thursday, 23 November 2017 07:20

As we approach the holiday season many people turn to thoughts on tradition, heritage, principles, duty, honor and family. They consider the accomplishments and even the failures of the past and where we are headed in the future. For most of the year, the average American will keep their heads in the sands of monotony and decadence and distraction. But during this time, even in the midst of the consumption frenzy it has been molded into, people tend to reflect, and they find joy, and they find worry.

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What perhaps does not come to mind very often though are the institutions and structures that provide the "stability" by which our society is able to continue in a predictable manner. While many of these institutions are not built with the good of the public in mind, they often indirectly secure a foundation that can be relied upon, for two or three generations, while securing power for the establishment. The problem is, the establishment is never satisfied with a static or semi-peaceful system for very long. They are not satisfied by being MOSTLY in control, they seek total control. Thus, they are often willing to create chaos and crisis and even tear down old structures that previously benefited them in order to gain something even greater (and more oppressive for the rest of us).

.....continue reading HERE

...also from ZeroHedge

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Timing & trends

Tesla Approaches Terminal Decline


Posted by Andreas Hopf - Special Situations

on Thursday, 23 November 2017 07:01

funnelSummary

- Financial performance deteriorates - structural unprofitability likely.

- Most cash raised recently is already burnt - next equity sale looms.

- Institutional ownership declines - distribution continues.

- Management churn accelerates - corporate culture looks damaged.

- Only the story matters - the stock remains a trade vehicle.

Here we are, seven months later, and Tesla's (NASDAQ:TSLA) financial performance deteriorates at an alarming rate. Bearish macro scenarios, always just around the corner since 2011, refuse to play out and Queen TINA and King FOMO remain enthroned. The much anticipated interest rate assault by central banks is further delayed. And once it arrives, it will do so in rather piecemeal fashion, unlike the infamous macro-scaremongers suspect. No surprise then that the Panglossian valuation of Tesla abides, while journalists and analysts alike continue falling for every new-fangled non-profit idea emerging from Palo Alto.

And then, as long as 1) wealthy consumers in western nations but also China are eager to seek indulgence by way of green-washing and, 2) are in search of a Steve Jobs replacement persona onto which they can project their hopes for a gleaming future and, 3) are disillusioned with the establishment and its leaders, the company will likely succeed to raise cash again. Some say it might already be too big to fail.

The Tesla narrative is based on an illusion, a contradictio in adjecto - the promise that humankind can shop and consume itself into a sustainable future. However, even a million Teslas on the world’s roads will not impact the environment for better or worse. It is a systemic issue. The Financial Times agrees. Sustainability and promoting the purchase of raw-material consuming heavyweight products are mutually exclusive. There is no right life in the wrong, to paraphrase Theodor Adorno.

At the time of writing, the company’s precarious financial position shows that it remains a bottomless pit. Let’s go in.

....continue reading HERE



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Asset protection

Mohamed El-Erian – Which Asset Classes are Most Vulnerable


Posted by Robert Huebscher

on Thursday, 23 November 2017 05:52

bb437615bd00c8ad81b8ce1bd0ce208aMohamed A. El-Erian is the chief economic advisor for Allianz SE. Before joining Allianz, Dr. El-Erian held positions as chief executive and co-chief investment officer of PIMCO and president and CEO of Harvard Management Company, the entity that manages Harvard’s endowment and related accounts. Dr. El-Erian was also a managing director at Salomon Smith Barney/Citigroup in London and spent 15 years with the International Monetary Fund in Washington, DC. 

Dr. El-Erian has published widely on international economic and finance topics. His 2008 best-seller, When Markets Collide, was named a book of the year by The Economist, and one of the best business books of all time by The Independent (UK). He was one of Foreign Policy’s “Top 100 Global Thinkers” for four years in a row, and is a contributing editor for the Financial Times. His newest book – The Only Game in Town: Central Banks, Instability and Avoiding the Next Collapse – is another New York Timesbest-seller. 

He replied to my questions in an email exchange on November 15.

What is your assessment of the overall health of the U.S. economy? In particular, do you agree with the narrative that the low unemployment rate (4.1%) indicates that we don’t suffer from a lack of aggregate demand?

The US economy is gaining momentum, on a standalone basis and as part of a synchronized pickup in global growth. This process would be turbocharged were Congress able to work with the administration to pass pro-growth measures, including tax reform and infrastructure. And, on the demand side, it would be further aided by an increase in the labor participation rate and higher wage growth in response to the sharp decline in the unemployment rate.

Last month, you wrote that investors must consider whether they are placing implicit bets on three scenarios: endogenous economic and financial healing, long-awaited policy breakthroughs and bigger liquidity waves. I’d like to ask about each of these. You’ve expressed optimism that the U.S. and Europe are on a path to sustained growth. Are you as optimistic about China and Japan?



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Gold & Precious Metals

Harry Dent’s Gold Prediction Invalidated


Posted by Przemyslaw Radomski - Sunshine Profits

on Thursday, 23 November 2017 05:41

We were recently asked to comment on Harry Dent’s predictions for the gold market and we thought that our reply might benefit other gold investors as well. To be precise, we were asked about Harry Dent’s 30-year cycle that supposedly peaked in 2011, and we supposedly could expect gold to peak again somewhere between 2038 and 2040 (you can watch the interview here). The indirect implication is that gold is not likely to soar sooner and that it’s likely to decline for a relatively long time.

Mr. Dent is referring to gold as a premier commodity and he claims that it moves up and down with the commodity cycle, which, in his opinion, is 30 years.

If the above is really the case, then the previous prediction may be well founded. But is it really so?

We respectfully disagree for two reasons.

The first reason is fundamental. Gold’s price reacts more to flows of gold than to mining supply and demand and thus it behaves more like a currency than a commodity. So, from the fundamental point of view, it may not be justified to view gold simply as a commodity (even a premier one).

The second reason is… Simply checking the facts and the facts confirm our thesis from the above paragraph, invalidating Mr. Dent’s claim that gold moves in a 30-year cycle.

The price of gold was fixed for most of history, so it’s impossible to analyze this cycle directly. No, that’s not our case against the theory. Our case is that we can use the best proxy that we have for the price of gold. The price of gold was fixed, but the prices of gold stocks were not and since the major tops and bottoms in both asset classes correspond to each other, gold miners could be used to check what gold could have done. The gold stocks ratio to the general stock market is even better because by using it we are taking out the part of the mining stocks’ price movement that depends on the stock market volatility.

Let’s check if this is indeed the case with the HUI to S&P 500 ratio (chart courtesy of http://stockcharts.com).

1-hui-spx



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Personal Finance

Anyone Can Invest!


Posted by Brent Woyat

on Wednesday, 22 November 2017 17:13

monopoly manHave you ever played the game Monopoly? If so, you’re probably familiar with the image of “Rich Uncle Pennybags,” the game’s unofficial mascot. Sporting a bushy white mustache, a black top hat, and a cane, Mr. Monopoly (as he is sometimes known) has become a cliché. Created as a caricature of J.P. Morgan, the legendary financier, Pennybags serves as a kind of stock image for the ultra-wealthy investor. 

Thanks to this and other stereotypes, some people seem to think that investing is a game for only the super-rich to play. But you don’t have to own a huge pile of cash to invest. That’s because investing isn’t about “playing the stock market.” It’s not necessarily even about getting rich. No, investing is about building for the future. It’s about compounding the money you already have so that you can afford to reach your goals in life. 

No matter who you are or where you come from, everyone has financial goals. Your goal could be to save for retirement so that you don’t have to work forever. It could be to help your children attend college. It could be to build a new house, open a business, or travel the world. It could be all those things and more. But achieving those goals costs money, and that’s where investing comes in. 

Nowadays, most people—even those with high-paying jobs—simply don’t earn enough regular income to achieve all their goals. It’s not enough to store your money under the mattress. Nor is it enough to put your money in a bank and rely on interest. In the 21st century, your money has to grow. It has to work for you. It has to outpace inflation. The good news? All of that can be accomplished through investing. 

People often ask me, “So how can I invest if I don’t have a huge pile of cash?” Fortunately, there are many ways. While I certainly wouldn’t recommend any one specific approach without understanding your personal financial situation, here are a few ways to get started:

Ÿ Set up a Tax-Free Savings Account (TFSA), which aside from allowing you to invest, also comes with specific tax benefits.

Ÿ Participate in your employers Defined Contribution Pension Plan or Employee Stock Purchase Plan.

Ÿ Invest in an index fund, which allows you to “match” the investments held in a market index, like the S&P/TSX 60 or S&P 500. Index funds are both simpler and less costly than most other types of funds, and can also help you diversify your portfolio. (See point #2 below.) 

Doing any of these things allows you to:

1. Start small. You don’t have to invest a lot of money all at once. Even a little bit is better than nothing, because once you’ve invested, your money can start growing and compounding in value. 

2. Invest in broad sections of the market. This is valuable because different industries or types of investments do better than others at different times. By participating in an index fund, you can effectively invest in several areas at once rather than relying on one specific investment to do all the work. This is known as “diversification.”

3. Save for the future. As you know, so many of the financial decisions we make are based on short-term needs. Meanwhile, our long-term plans are ignored. But by investing wisely, you are actively determining what tomorrow will be like…today! 

Of course, it’s not enough to simply invest. To reach your goals, it’s even more important to invest wisely. That’s why it’s sometimes a good idea to seek out the advice of a qualified financial advisor. With an experienced advisor, you can get unemotional, educated insight into how to invest properly. 

But the most important thing to remember, is that you don’t have to wear a top hat or own a hotel on Boardwalk to invest. And because you can invest, you don’t have to wait another day to begin working toward your goals in life. So go out and start determining what tomorrow will look like…today!

Brent Woyat, CIM, CMT

Portfolio Manager

www.retiretoday.ca

www.brentwoyat.com



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