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Another Catastrophic Bank Run PDF Print E-mail
Written by Martin Armstrong - Armstrong Economics   
Friday, 27 June 2014 06:53

Bulgaria-Bank-Run-June-24-2014Bank Runs in Bulgaria

The financial system is simply imploding because those running the affairs of government are more concerned about retaining power than providing economic stability. There are people who are so polarized on each side of many issues from hyperinflation, global elites, socialists hating the rich, communists who see capitalism as evil, and politicians who blame tax avoiders. There is so much polarization within society that there cannot be any solution for everyone has a fixed opinion and only they are right. This is then exemplified in government. They too only see their point of view and it is simply that they lack 100% control of everything (communism) and this is why it is failing.

Now we have bank runs in Bulgaria. The entire fabric is coming undone and this is part of the fuel that sends everything into chaos and the risk of war as tensions rise and people blame someone else be it rich, foreigners, bankers, or corporations. This is the time where clear reasonable thinking and solutions become impossible.

The IMF is now urging the ECB to start buying government bonds of the member states. They have no solutions but the same old bad of tricks. There is nobody even capable of thinking out of the box in a position of power. We are plagued by lawyer-politicians in the total absence of anyone with experience in international money management – the void of experience and statesmanship.

...also from Martin:

Argentina Fights Back

Capital Has Always Invested on Net Return for Millennia

 
Gold Miners: Strong Upside Ahead PDF Print E-mail
Written by Jordan Roy-Byrne - The Daily Gold   
Friday, 27 June 2014 06:42
Gold Miners Nearing Strong Monthly & Quarterly Close

The gold and silver miners have cooled off in recent days after a red-hot start to the summer. Could this cool off be the start of another move lower or a pause before another leg higher?  We continue to be bullish and a new reason is the sudden strength in the monthly and even quarterly charts. For larger or developing trends, monthly charts supersede weekly charts, which supersede daily charts. With only two days left, the gold and silver miners are poised to end the month and quarter with their strength intact. 

If GDXJ, (shown below) can close June above $41.34 then it will achieve its highest monthly close in 10 months. At the least, GDXJ is set to close at a four month high in monthly terms while engulfing nearly the last three months of trading. Compare that to the monthly advances in July and August of last year and January and February of this year. Those gains were weaker in comparison. Moreover, the strong gains in June are confirmed by the explosion in the volume.

june26edgdxj

The monthly chart for GDXJ clearly shows long-term support and resistance. The May and June lows (~$33) are support while the next major resistance figures to be $50. In our last missive we mentioned that GDXJ’s next weekly resistance was $44. GDXJ’s June high is $43.52. Recent weakness and consolidation could continue in the short-term. I see support for GDXJ at $39 (and GDX at $24.75). Nevertheless, GDXJ has material upside from here to its next resistance at $50. 

GDXJ is a proxy for the junior gold mining sector but I am not a fan for several reasons. It contains too many silver stocks, too many Australian based companies and some companies I would never consider buying. Stockcharts.com now allows subscribers to upload their own data and essentially create their own charts. Below is a daily chart of my top 15 index, which hit a 16-month high last week. Note how the 200-day moving average was resistance in 2013 and is now support. The index could be forming the handle on a small cup and handle pattern that has potentially 27% upside from here. (That upside coincides with GDXJ’s upside to resistance at $50)

june26edtop15

There are two takeaways from this article. First, the strength in the monthly (and quarterly charts) should confirm or at least strengthen the argument that the miners are in a new bull market. We have not seen this kind of strength (with volume confirming) to close a month or a quarter since this bottoming process began a year ago. It’s a signal that buyers are more comfortable holding their positions indefinitely.

Second, there continues to be strong upside potential for the sector in the months ahead.

Our top 15 index shows the strongest companies are leading the way for the rest of the sector. Other than monthly resistance at $50, GDXJ has no major resistance until $70. Most of the upside potential remains ahead of us. With the big declines likely behind us, we think it’s wise to take advantage of dips in the short-term as we see potential for roughly 25% upside to Labor Day. We invite you to learn more about our premium service in which we highlight the best junior companies and trade and invest a real portfolio for subscribers benefit.

Good Luck!

Jordan Roy-Byrne, CMT

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2014 Q2 Economic & Energy Metals Review & Second Half Outlook – Part I PDF Print E-mail
Written by Chris Berry - The Disruptive Discoveries Journal   
Friday, 27 June 2014 06:36

 

 

  • Energy Metal Performance Q2 2014During the second quarter of 2014, many share prices of energy metals companies struggled for direction after the dust settled from the Tesla (TSLA: NYSE) Gigafactory announcement.                                                     

  • Our theme of viewing the supply and demand dynamics of each energy metal individually continues to be the best course of action as the trajectories of each metal may differ. For example, lithium carbonate prices remained healthy while uranium prices fell by 8% in Q2 and are down 21% YTD.                                   

  • The recent precious metals price spike did not transfer over into the industrial or base metals sector.

  • Though economic data continues to improve selectively, there are still too many economic headwinds in place. Therefore only those resource investments that demonstrate the ability to produce at lowest-cost quartile costs or those that have a disruptive competitive advantage should be considered at this time.          

  • Despite nascent inflationary pressures, we are still inclined to believe that deflation (or disinflation) is the predominant threat to growth. The recent US Q1 GDP print of a 2.9% decline has many concerned that this was due to more than “the weather”.                   

  • We think that the second half of 2014 will be just as challenging as the first half for reasons we outline below.

....read more HERE 

 

 

 

 

 
Why Most Will NOt Reach Their Retirement Goals PDF Print E-mail
Written by Peter Grandich   
Thursday, 26 June 2014 16:39

Outside of maybe saving for your children’s college education, Wall Street spends more time trying to convince you that you need them to solve another big financial concern of yours – retirement. The mere thought of not having enough or outliving your assets can truly scare the “heck” out of you… and they take full advantage of that!  http://www.zerohedge.com/news/2014-04-28/these-are-top-financial-concerns-ordinary-americans
Don’t get me wrong, I know retirement is at the top or near the top of everyone’s mind when it comes to the future regardless of their wealth (or lack of). I’m not here to make light of it but I can tell you my stance towards it is very uncommon.  http://blogs.marketwatch.com/encore/2014/04/30/the-retirement-income-crisis-in-one-chart/
I devoted a whole chapter to it in my book “Confessions of a Wall Street Whiz Kid” (Chapter 13 and you can read a free pdf file of here). Calling it a “Man-made Myth” doesn’t win a lot of friends and certainly wouldn’t gain me employment in most financial services firms (Thank God). But if you grasp what I said in that chapter and not fall for those financial services firms commercials (whereupon they show you “older” people enjoying their “golden years” with an implied suggestion they do so mainly because of the advice of the financial service firm running the commercial), we can work towards securing ones “golden years” in a realistic in truly viable process.  http://www.confessionsofawallstreetwhizkid.com/ed2.html
After 30 years in and around the financial services industry, I’m sorry to say the industry as a whole still sells primarily in one fashion. After giving the client a headache, most planners sell the client an aspirin. Most financial service organizations focus on product based solutions. The challenge with this method is often additional cost and the future performance of the product is unknown. The other challenge is when you define success predominately on Net Worth and assets under management, you lose sight of some key points.

In our alternative, the main difference is we focus on a process to build and protect wealth with efficiency at the core. The difference is we define Wealth as Cash Flow and quality of life. We use an academic approach to asset management and protection not an emotional one based upon what some products have done in the past. We all have heard that “Past performance is not indicative of future results”, but the public is sold and buys this everyday as if it’s success is assured in the products that their sold. Honestly it is not!

We do three things in our process:

1- Our objective is to deliver unique and verifiable strategies to increase wealth over and above what one is currently on track for.
2- To do this without taking on more risk, in fact we usually greatly lower the risk(s) our clients are currently exposed to.
3- And to achieve the above without having to sacrifice your lifestyle.

Of course I welcome American and Canadians to consider seeking me out to learn more about this process, but whether you’re in a position to or not, I want to pint out a few articles that I think can be very beneficial to you:
• This article does a very good job of pointing out one of our biggest pet peeves shown during our process on how fees most financial firms have built into the products and services they have you use “absolutely” greatly dampen your chances to reach your goals but increases theirs. http://www.marketwatch.com/story/dont-you-deserve-more-than-20-of-your-gains-2014-04-15?link=mw_home_kiosk
• Another critical aspect of retirement planning most firms at best give lip-service to but is a vital part of the work we do with our process for North American’s. http://www.marketwatch.com/story/retiring-tune-up-your-psychological-portfolio-2014-04-26
• As it has done since I first became a stockbroker back in the dinosaur age in 1984, the financial service industry creates products that “seem” to be  the “cure-all’ but in fact the only financial curing done is for those selling the products. Today’s “Index Annuity” craze is tomorrow’s arbitration lawsuits nightmares. For most, run, don’t walk away from these products. http://www.marketwatch.com/story/confessions-of-an-indexed-annuity-insider-2014-04-29

As I enter the so-called “golden years” myself (and live in a 55 and over community), I can appreciate the concerns one has to live out their lives as best as possible as well for many to leave a legacy.
For those in North America with an income of at least $150,000 a year or a net worth of at least $1 million (outside of your home), please feel free to contact me about the process I speak of at This e-mail address is being protected from spambots. You need JavaScript enabled to view it
I also like to recommend two books written by my financial mentor and one of only three people I entrust my own family to count on besides me on matters of finance, Mr. Frank Congilose.  http://www.amazon.com/s/ref=nb_sb_noss_1?url=search-alias%3Daps&field-keywords=frank%20congilose&sprefix=frank+cong%2Caps&rh=i%3Aaps%2Ck%3Afrank%20congilose

YOU MUST READ THIS!!!   http://charleshughsmith.blogspot.com/2014/06/the-happy-story-of-boomers-retiring-on.html

 
Better Than Gold? Switzerland On Sale PDF Print E-mail
Written by Wealth Daily   
Thursday, 26 June 2014 13:27

swissflagAlthough markets have been a bit skittish so far this year and despite concerns about growing debt and slower growth, there are plenty of great value opportunities out there for alert investors.

Still, it makes sense to play some defense by hedging your stock picks with what I call “shock absorbers.” Cash, gold, silver, and high-quality bonds come to mind, but there are also some better options out there — namely stable markets and their currencies.

But first, let's take a look at three qualities that make a country a good hedge and safe haven:

1. Strong, stable currency with ample liquidity

The country's currency should demonstrate deep liquidity so that investors can move in and out of it without sharp movements in price. It needs to be widely recognized as a reserve currency.

2. Financial and political stability

The fiscal discipline and political stability of the country needs to be unquestioned. Countries with large fiscal deficits are unable to be dependable safe havens since the path of least resistance is to devalue the currency to make debt loads more manageable.

3. Market-based, rules-driven, open economy

Investors and trading partners thrive best in a market-oriented economy where the rules are clear and transparent. Faith in the fairness of the judicial system and institutions is vitally important.

Switzerland and the Swiss franc fit the bill nicely.

For starters, relatively small Switzerland is home to four of the five largest firms in Europe in terms of market value: UBS (NYSE: UBS), Nestlé (OTC: NSRGY), Novartis (NYSE: NVS) and Roche. These companies are increasingly tapping into emerging market growth.

Switzerland also has a number of other factors on its side:

 

  • It has the highest per-capita income in the world.

  • While it's only 137 miles by 216 miles in size with a population of 7.2 million, Switzerland packs a punch and is a financial and multinational powerhouse.

  • The Swiss franc is backed by ample gold reserves, fiscal discipline, a trade surplus, and very little foreign debt.

  • Outward looking, Switzerland has 40% of its gross domestic product attributed to exports.

  • Switzerland represents the third-largest financial center in the world after New York and London. It is also home to world-class pharmaceutical, engineering, and food companies.

  • Switzerland enjoys a stable government, vibrant democracy, and a reputation as an asset haven in times of stress. The Swiss have had a functioning democracy for 500 years and actually have a fairly weak central government, with a legislature that meets for only two weeks, four times a year. (Good idea for U.S. Congress?) Voters actually defeated a referendum that would have implemented a shorter workweek and longer vacations.

  • All men between the ages of 20 and 42 are required to engage in military training each summer, resulting in an army of 625,000. Swiss Guards have protected the Vatican since 1506.

Switzerland is on Sale

That all sounds pretty good, especially since the Swiss stock market is trading at a discount to the S&P 500. Now, how should Switzerland become part of your portfolio?

Large, global blue chip companies are almost always favorable due to attractive price-to-book valuations, entrenched brand names, dominant market shares, proven management teams, solid free cash flows, and double-digit growth potential.

What better way to play this trend than with Swiss quality, value, and global growth?

The iShares Switzerland Index (NYSE: EWL) is a smart way to gain exposure to a basket of Switzerland’s leading multinationals and has an expense ratio of only 0.59%. In addition, while a rising Swiss franc puts pricing pressure on Swiss exporters, a strong Swiss franc supercharges returns for investors in EWL.

My go-to stock pick in Switzerland is Nestlé (OTC: NSRGY). This consumer giant has a share-buyback program, a focus on growth in emerging consumer markets, and a rising dividend.

ABB (NYSE: ABB) is a terrific infrastructure play and has been on a tear, winning power and automation-technology contracts all over the world.

You may also wish to pair EWL with iShares Singapore (NYSE: EWS). Singapore is the “Switzerland of Asia,” with $40,000 of foreign exchange reserves for every citizen.

And if you only want exposure to the Swiss franc, take a look at the CurrencyShares Swiss Franc Trust (NYSE: FXF).

You can’t go wrong buying Swiss quality — and it's even better if the country is on sale.

Until next time,

Carl Delfeld for Wealth Daily

 

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Mark Leibovit
23 July 2014 ~ Michael Campbell's Commentary Service

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