Wednesday, December 9, 2009


House Flipping Makes a Comeback

Four years after the collapse of the U.S. housing bubble, flipping homes is back in fashion.

Jon Mirmelli, a Phoenix real-estate investor, learned late in the morning of Sept. 28 that a never-occupied custom house on the northern fringes of this Phoenix suburb was going up for auction around noon the same day. The six-bedroom home, built on a three-acre desert plot, has a kitchen with two dishwashers, four ovens, "antibacterial" copper sinks, and a master "spa" bathroom with space for a flat-screen TV visible from the tub.

The minimum bid, as set by a unit of Citigroup Inc., which had a $1.3 million mortgage on the home, was $379,900. After several minutes of bidding among investors and their representatives, some wearing shorts and flip-flops, Mr. Mirmelli won the home for $486,300. A week later, he agreed to sell it for $690,000 to a woman who moved in this month.

During the housing boom, millions of Americans tried to make money by buying and then quickly reselling new houses and condominiums. That kind of flipping stopped several years ago as home sales stalled amid a surge in foreclosures and curtailed lending. (more)

Jay Taylor: Turning Hard Times Into Good Times

click here to listen

Dollar Rally Imperils S&P 500, Bartels Says: Technical Analysis

The dollar’s biggest rally since January signaled losses for the Standard & Poor’s 500 Index, according to Mary Ann Bartels at Bank of America Corp.

The Dollar Index, which tracks the currency against those of six major U.S. trading partners, had the biggest gain in 11 months on Dec. 4 and rose above its average level from the prior 50 days to close last week at 75.911. Bartels, who studies charts to make forecasts, said the gauge may now reach 76.82, a level last reached on Nov. 3. It has lost the most since 1986 in the past nine months.

“The U.S. dollar is bottoming,” Bartels, ranked second among technical analysts in Institutional Investor magazine’s 2009 survey, said in an interview yesterday. “It appears to be the most unloved asset class and sentiment is grossly oversold. A stronger dollar should be negative for stocks.” (more)

Gerald Celente Bernanke is destroying the US economy

Germany still paying off £50million in reparations following World War One

is still paying off £50million of the 'reparations' demanded from it after the end of First World War.

The German Finance Agency, its authority on debt management, said tens of millions of euros are still being transferred to private individuals holding debenture bonds as agreed under the Treaty of Versailles signed on June 28, 1919.

The bonds were issued at the time to investors. (more)

Marc Faber on sovereign debt default : American & Greek

Food… The Trade of the Decade

“If you can tell me something else where the fundamentals are so attractive…I’d be happy to put my money there,” said Jim Rogers, the famed investor and self-made billionaire in a recent interview. “But I don’t know of any other place.”

What’s he talking about? Agricultural commodities like soybeans, wheat and corn.

We begin our analysis with some simple “big picture” truths. The world’s population has more than doubled since 1950 – from about 2.5 billion to 6.7 billion. By 2050, there will be more than 9 billion people on the planet. Almost all of this growth will occur in the emerging markets like China and India. And their populations will all be doing one thing, for sure – eating.

Now, hang on. I know that is a banal insight by itself, but this story has more layers than a tiramisu. After population growth, he second layer is the mix of food eaten, which is important. These undeveloped economies are becoming wealthier. Predictably, as people everywhere have done and continue to do when they have a little more money in their pockets, they change their diets. They spend more on food. The average Chinese person spends 40 cents of every additional dollar earned on food. In India, it’s about 70 cents of every additional dollar. What do they buy? (more)

Hedge Guru Paulson Buying Stocks

Hedge fund manager John Paulson said on Tuesday he still sees compelling long-term returns in equities even after their sharp run-up this year, while holding no short positions in the credit markets.

"Today our net long exposure is perhaps the highest it has ever been in our portfolio," Paulson said during a luncheon presentation at the Japan Society.

"We still find a lot of compelling long investments on the equity side," he said, citing specifically Bank of America , U.S. cable-television giant Comcast Corp , and Germany's HeidelbergCement AG .

Paulson said that at the end of 2008 he viewed the credit correction as having run its course. By April he had poured cash back into the sector. (more)