Climbing on Commodities
It seems hard to believe, but not long ago, the financial markets, politicians, and consumers were gripped by panic over a spiraling bout of inflation. It was only last summer when the price of oil, in what seemed an unstoppable climb, reached $147 a barrel. Other commodity prices also surged, bringing rivers of cash to commodity exporting countries, but leaving impoverished people, some in those same countries, unable to afford even a subsistence diet. Food riots ensued and experts warned that worse was coming. The end was near.
A crisis did come, but it was exactly the opposite of those predictions. With the financial unraveling that started last fall, economies shrank, commodity prices collapsed, and fear of inflation became fear of deflation. Oil prices sank to the $30s with some experts predicting they would head even lower.
Lessons of flu
Delia the door-person in my building, with whom I interact a couple of times a day, is off with the flu. Panic all around.
Until now, when people tell me in a normal-sounding vigorous voice that they have the flu, I have to keep from laughing. Having had a full-blown case of influenza in late 1968, I was very sick indeed and did not sound like them. The fever and coughing were no worse than a cold, but with a real flu your body goes all limp. Your muscles give way. You cannot stand or move normally and your arms ache from holding anything. Your voice weakens as your body strength's collapses. Read more »
By Frida Ghitis
Is the market really turning around, or are recent gains simply more sleight-of-hand in which our pockets will get picked while we happily look at a shiny object?
Or, changing metaphors, are those real bamboo shoots in China or are they tiny weeds that will quickly wilt and die? China’s purchasing managers’ index, the CLSA, rose in April for the first time in nine months. Lest we forget, there is a real connection between the markets and the economy. Obscure economic statistics can tell us a lot about the underpinnings of the market.
Stock market observers with tell us the eye-popping moves of the last couple of months are a mirage, nothing more than a “bear market rally” destined to revert to painful bear market ways. They elucidate this mostly from reading of charts and other mysterious tea leaves. Read more »
Journal of the Plague Year
It’s back to 2001 or maybe the 18th century. First there was that awful Air Force 1 plane over the
And French financial analyst Martial Godet is telling the world to buy BRIC stocks. To quote Yogi Berra: "It's déjà vu all over again." Read more »
Safety, yield, and growth
Many readers got e-mail by our former publisher, Rightside Advisors, advertising Michael Shulman's Superstock Investor, a respectable if bearish Internet publication.
In Feb., RSA's former CEO and CFO said it could not turn over to my firm subscription lists to allow us to fulfil its subscription liability, to be provided under an agreement with my company. That means we could not send issues to people who had paid for them, because we did not get the records. Read more »
I will be writing about Exchange-Traded Funds at length on Weds. to give readers a sense of the perils of the vehicle as well as its charms. It's easy to take a macro-economic position with ETFs. You can use them to play global trends, or to go long and short at the same time.
One cloud over the ETF market is fear that fees will rise. The sale by Barclays of its iShares ETF business may result in higher expenses.
To short and long at the same time works if a particular stock you own can beat its industry or its country. So you short the ETF for that part of the market while going long the share. Alternatively, if you spot a real loser, you protect yourself against an overall market rise by going long the ETF while shorting the stock.
This tactic (which used to be called hedging, before hedging became the flavor du jour for lots of other strategies), can remove market risk from a long or short position in a single stock. However, it is also perilous. Read more »
Eektrade and Paypay
When I re-started Global Investing this March I wanted to take subscription orders without the messy process of collecting checks. So at the urging of contributor Frida and webmaster Roger I signed my company up with Paypal, a service of the highly profitable E-Bay empire which reported a 10% earnings rise year over year today.
A quick process resulted in their confirming my company's legal existence as a New York corporation, its bank account at Chase, its taxpayer I.D., and our website. We looked to be in good shape.
Since then for me and my customers, working with Paypal has been a learning experience, mostly unpleasant. An 80-year-old CA subscriber gamely signed up with Paypal to pay for his new subscription and within a matter of days was hit by a "phishing" scam demanding his bank and other information for Paypal. He and I think there was a leak causing him a lot of anxiety and wasted time, but the webmaster (who worked hard on the matter) says the phishing goes on independently. Read more »
Life after Gracie Mansion
Because of important earnings releases today, the commentary portion of this message is short.
Is there life after
Trophy Building Bought
For a New Yorker in the financial services business, like me, there is ominous symbolism in the takeover from the troubled Macklowe real estate group of the FT building beside the Museum of Modern Art. The buyer of the trophy building which houses The Financial Times is the Caisse de Depots of Canada, operator of retirement funds for French-speakers like our webmaster.
Canada today joined the global trend to quantitative easing, by cutting interest rates to 0.25%. But according to Bloomberg there are key differences between financial groups up north and those from the U.S.A. "Canadian banks are remarkably profitable", the service argued, "outperforming their peers, because of tighter government restrictions on lending and capital requirements." Read more »